KARACHI: The trade deficit continued to shrink in November, with the pace of the declines accelerating, according to data tweeted by Commerce Adviser Abdul Razak Dawood on Sunday.
The country’s trade deficit during the July-November period fell to $9.496 billion from $14.47bn in the same period last fiscal year.
The widening trade gap has been at the heart of the deterioration of economy’s external stability and falling foreign exchange reserves. It’s decline takes pressure off the external account.
The exports during the period increased by 4.8 per cent to $9.55bn compared to $9.11bn whereas imports – which have been on the declining trend during the fiscal year – fell by 19.27pc to $19.04bn from $23.59bn last year.
The adviser tweeted that “the increasing trend of exports is continuing which is a testament to the policies of Prime Minister [and] as a result of the same policies of the government the increasing exports are contributing to improvement in our balance of payments position and stabilisation of the economy.”
For the first time in more than four years, the country posted a current account surplus of $99 million in October, from $1.28bn during the corresponding month last fiscal year.
Government’s policy interventions including macro adjustments and currency flexibility have helped improve the balance of payments position, especially the current account balance. The improvements were also acknowledged by Moody’s which changed the country’s outlook from “Negative” to “Stable” on Monday.
The data tweeted by the adviser further showed that exports during November also increased by 9.6pc to $2.02bn from $1.843bn during the corresponding month last year. On the other hand, imports registered a 17.53pc decline, falling to $3.815bn from $4.62bn last year. The decrease led to a plunge in trade deficit during November by 64.5pc or $988m to $1.795m from $2.783bn last year.
Dawood further said that “Pakistan’s exports in November have once again crossed $2bn mark. Hats off to our exporters and the team at [the commerce ministry]. Exports increased by 9.6pc compared to 2018. Trade deficit/balance has shrunk by $988m in Nov and by $5bn in five months.”
Commenting on the declining trade balance, he said the decrease of $5bn during the five months will help the government save foreign exchange reserves and will have a significant on further reducing the current account deficit.
The country’s exports are likely to increase further in the coming months as the second phase of China-Pakistan Free Trade Agreement came into effect on Dec 1.
Under the agreement, China will allow imports of additional 313 new items from Pakistan.
Published in Dawn, December 3rd, 2019