ISLAMABAD: Pakistan’s trade deficit with the nine regional countries slightly went up 0.5 per cent to $4.539 billion in the first seven months of the current fiscal year from $4.516bn over the corresponding period of last year, mainly due to an increase in imports from China and India.

Exports to regional countries, particularly China and Sri Lanka increased significantly over the review period but exports to other regional countries remained negative, according to data compiled by the State Bank of Pakistan (SBP).

In absolute terms, the value of Pakistan’s exports to the nine regional countries — Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives — rose 21.64pc to $2.613bn between July and January 2023-24 from $2.148bn over the corresponding months of last year.

Contrary to this, imports saw an increase of 7.32pc to $7.152bn in 7MFY24 from $6.664bn over the

corresponding months of last year. This shows a slight increase in trade deficit with all these countries in FY24.

In FY23, exports to regional countries dipped year-on-year by 21.1pc to $3.331bn.

Pakistan’s bulk of the regional exports, which accounts for over 60pc, go to China while the rest to the remaining eight countries.

Exports to China increased 44.55pc to $1.726bn in July-January FY24 from $1.194bn over the corresponding period last year. In FY23, the exports to China declined 27.3pc to $2.02bn from $2.78bn in FY22. It was the first decrease in the post-Covid period.

The imports from China also increased by 7.65pc to $6.959bn in 7MFY24 from $6.464bn over the corresponding months of last year. The bulk of imports in the region is also sourced from China followed by India.

Pakistan’s imports from India increased by 15.12pc to $120.62 million in 7MFY24 compared to $104.77m in the same period last year. Despite trade barriers, India has become Pakistan’s second-largest import destination. Exports to India declined 1.96pc this year to $0.150m compared to $0.153m during the same period last year.

Pakistan’s exports to Afghanistan dipped 0.08pc to $284.93m in 7MFY24 from $285.17m in the same period last year. The imports from Afghanistan are very negligible.

Till a few years ago, Afghanistan was the second-largest export destination for Pakistan after the United States. The export figures did not include proceeds materialised through the land routes. However, Pakistan has allowed Afghanistan to encourage exports.

A very negligible export was made to Iran in 7MFY24. Most of the trade with Tehran is carried out through informal channels in border areas of Balochistan.

Exports to Bangladesh decreased 23.34pc to $367.77m from $479.75m in July-January 2023. The import from Bangladesh declined by 30.47pc to $33.85m in 7MFY24 from $48.69m over the corresponding period of last year.

Exports to Sri Lanka surged by 24.65pc to $227.25m in 7MFY24 from $182.31m in the same period last year. A slight increase was noted in imports from Sri Lanka when it reached $33.94m this year against $32.96m over the corresponding months of last year.

Shipments to Nepal rose year-on-year by 2.17pc to $1.88m in 7MFY24. Shipments to the Maldives increased 12.89pc to $5.34m from $4.73m.

No export to Bhutan was recorded in 7MFY24.

Published in Dawn, March 10th, 2024