Trade deficit with region widens in 1QFY22

Published November 14, 2021
Pakistan’s exports to nine regional countries posted a growth of 31.56 per cent while imports grew by nearly 43pc in the first quarter of current fiscal year (1QFY22) from a year ago. — Reuters/File
Pakistan’s exports to nine regional countries posted a growth of 31.56 per cent while imports grew by nearly 43pc in the first quarter of current fiscal year (1QFY22) from a year ago. — Reuters/File

ISLAMABAD: Pakistan’s exports to nine regional countries posted a growth of 31.56 per cent while imports grew by nearly 43pc in the first quarter of current fiscal year (1QFY22) from a year ago, latest data released by the State Bank of Pakistan showed.

The country’s exports to Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives account for a small amount of $946.218 million — just 13.5pc of Pakistan’s total global exports of $6.997 billion in 1QFY22.

China tops the list of countries in terms of Pakistan’s exports to its neighbours, leaving other populous countries India and Bangladesh behind. Pakistan carried out its border trade with the farther neighbours including Nepal, Sri Lanka, Bhutan, Bangladesh and Maldives via sea only.

On the other hand, imports from these countries edged up to $4.128bn in July-September this year against $2.894bn over the corresponding period last year, an increase of 42.6pc. As a result of huge imports, Pakistan’s trade deficit with the region expanded during the period under review.

Pakistan’s exports to China posted positive growth in July-Sept FY22. The bulk of the regional exports share, which accounts for 59pc, is with China while the remaining is for eight countries. Pakistan’s exports to China posted a growth of 69.7pc to $559.158 million in the first three months of this year from $329.421m in FY21. The increase in export proceeds was noted in the post-Covid period, especially the exports of rice.

Imports up 43pc during the period

Contrary to this, imports from China grew 43.6pc to $4.012bn during the period under review against $2.793bn over the last year. The bulk of 97.1pc imports is coming from China alone while remaining imports are from other eight countries.

Pakistan’s exports to Afghanistan posted a negative growth of 39.17pc to $127.647m in FY22 from $209.868m in the same period in FY21. The decline in exports to Afghanistan is mainly due to uncertainty in the post-Taliban takeover of Kabul and subsequent issues in banking channels. Till a few years ago, Afghanistan was the second major export destination for Pakistan after the United States.

Imports from Afghanistan posted growth of 88.49pc to $33.589m against $17.820m over the last year mainly driven by higher arrivals of essential kitchen items including tomatoes, potatoes and onions as well as fresh and dried fruits. In the post-Taliban period, government has facilitated imports at Torkham as well as Chaman border stations especially of essential food items including fruits and vegetables.

The country’s exports to India plunged 90.4pc to $0.099m this year from $1.035m in FY21. The imports from India dipped 14.9pc to $42.502m against $49.947m over the last year. The government has suspended trade relations with New Delhi. Since the arrival of Covid-19 pandemic, the government has only allowed import of pharmaceutical products from India.

Pakistan’s exports to Iran at the official channel were not recorded in the first three months of the current fiscal year. Most of the trade with Tehran is carried out through informal channels via the border areas of Balochistan. No imports were made from Tehran during the period under review.

Exports to Bangladesh increased 37.57pc to $175.389m in the first three months of FY22 from $127.487m. Imports from Dhaka posted growth of 43.96pc to $17.446m this year against $12.118m over the last year.

Published in Dawn, November 14th, 2021

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