Pakistan trade deficit registers over 30pc decline in Jul-Feb 2023-24
Business
Exports up 9pc, imports down nearly 12pc
ISLAMABAD (Web Desk) – Pakistan witnessed a massive reduction in trade deficit during the July-February period amid rising exports and declining imports, the latest data released by the Pakistan Bureau of Statistics (PBS) shows, as the country badly needs to improve its foreign reserves and minimise import bill.
The reduction in trade deficit was 30.18 per cent in the first eight months of 2023-24 – the current fiscal year – which stood at $14.872 billion against $21.299bn during the corresponding months of 2022-23.
According to the monthly data released by the PBS, the exports had jumped by 9pc to $20.351bn during the period under review when compared to $18.670bn in the previous fiscal year.
On the other hand, Pakistan had an 11.87pc decline in imports which was recorded at $35.223bn against $39.969bn in the same period of 2022-23.
Last fiscal year 2022-23 saw Pakistan’s net trade deficit narrowed by 43.03pc to $27.547 billion against $48.354bn recorded in 2021-22.
The latest data coincides with the encouraging news coming out of the inflation front as the prices in February rising at the slowest rate since June 2022.
This decrease in consumer price index (CPI) for the second consecutive month on year-on-year basis means the prices had risen by 23.1 per cent in February against January’s figures of 28.3pc. The CPI had reached its highest level of 38pc in May last year, which was recorded at 21.3pc in June 2022.
However, there was no change on month-on-month basis, says the Pakistan Bureau of Statistics (PBS).
When it comes to urban inflation, the increase in CPI was 24.9pc on year-on-year basis with a slight upward movement of 0.2pc on month-on-month basis.
But the rise in rural inflation measured through CPI was recorded at 20.5pc when compared with the corresponding month last year when it had touched 25.7pc.
It is mainly due to a declining trend in food prices that has enabled CPI to slow in February, as food inflation on year-on-year basis in urban centres was clocked at 20.2pc and 19pc in rural areas against the corresponding values of 27.4pc and 25.1pc.
As far as the change in month-on-month basis is concerned, the food prices dropped by 0.3pc in urban and 1.5pc in rural areas.
Meanwhile, non-food items too witnessed a similar trend in February, the CPI in this category recorded a 28.2pc rise on yearly basis for urban consumers and 22.1pc for rural consumers when compared the corresponding figures of 32.3pc and 26.3pc.
The interest rates in Pakistan are currently at the record high level of 22pc with a paralysing effect on economy which badly needs economic revival for expansion of existing businesses and creation of new ones, as a vast majority crushed by the costs of living crisis urgently needs more jobs and wage hikes.
However, rate cuts are only possible if inflation declines persistently. But any further energy tariff hikes and increase in fuel prices will surely change the trajectory and delay any welcoming decision by the State Bank of Pakistan.
