Trade deficit surges 19.5pc in September

Updated 06 Oct 2020

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Pakistan’s trade deficit widened by 19.49 per cent to $2.391 billion in September, compared to $2.001bn during the same month last year, data released by the Pakistan Bureau of Statistics (PBS) showed. — Reuters/File
Pakistan’s trade deficit widened by 19.49 per cent to $2.391 billion in September, compared to $2.001bn during the same month last year, data released by the Pakistan Bureau of Statistics (PBS) showed. — Reuters/File

ISLAMABAD: Pakistan’s trade deficit widened by 19.49 per cent to $2.391 billion in September, compared to $2.001bn during the same month last year, data released by the Pakistan Bureau of Statistics (PBS) showed on Monday.

The consistent decrease in imports during the last fiscal year and in the first two months of current fiscal year helped government manage external account despite a downward trend in exports.

However, the PBS data showed that imports during September witnessed a double-digit increase. As a result, the trade deficit between July-September widened to $5.804bn, up 2.02pc from $5.689bn.

During FY20, the trade deficit narrowed to $23.099bn from $31.820bn.

Wheat, sugar and industrial raw material imports were main drivers

An official source at the Ministry of Commerce told Dawn that the government’s decision to allow import of sugar and wheat will increase the import bill and widen the trade deficit. The government has allowed the import of these commodities to help meet the local demand.

At the same time, import of raw materials and semi-finished products for various industries have also increased after the government abolished regulatory duty on these items in the budget.

Meanwhile, imports posted a positive growth of 13.22pc in September to $4.264bn, as against $3.766bn over the corresponding month of last year.

During 1QFY20, overall import bill marginally increased by 0.56pc to $11.262bn against $11.199bn over the corresponding months of last year.

Contrary to this, export proceeds posted a growth of 6.12pc to $1.873bn in September as against $1.765bn over the corresponding month last year.

Export proceeds during July-September declined by 0.94pc to $5.458bn as against $5.510bn over the corresponding months of last year.

The new fiscal year started on a positive note as export grew 5.8pc in July but fell over 19pc in August, as per the PBS data. Exports witnessed sharp declines between March to June after the government imposed lockdowns to contain the spread of coronavirus.

In rupee terms, export proceeds increased 12.94pc year-on-year in September. In FY20, exports fell by 6.83pc or $1.57bn to $21.4bn, compared to $22.97bn the previous year. Visible improvement was observed in export orders from international buyers, mainly in the textile and clothing sectors since May.

Published in Dawn, October 6th, 2020