Pakistan Bureau of Statistics has released the data for the month of Dec’18 shows the trade deficit during the month stood at USD 2.37bn, a 26-month low, down by 19% YoY and 15% MoM. Exports for Dec’18 settled at USD 2.08bn, increasing by 5% YoY / 13% MoM. On the other hand, imports plummeted by 9% YoY / 4% MoM to USD 4.44bn.
During 1HFY19, trade deficit clocked-in at USD 16.82bn, down by 5% YoY compared to USD 17.72bn in 1HFY18. This improvement in trade balance is due to slight growth in exports of 2% YoY to USD 11.22bn, whereas imports witnessed a decline of 2% YoY to USD 28.04bn.
Government’s efforts to control swelling imports (significant rupee depreciation of 24.4% against the USD, interest rate hike (+425 bps CYTD) and other measures such as regulatory duties) are noticeable in Transport imports (-25% YoY), Machinery imports (-19% YoY), Miscellaneous imports (-16% YoY) and Food imports (-8% YoY).
Albeit, imports of Petroleum products increased by 15% YoY due to surge in international oil prices despite decline in quantity, and Agriculture and Other Chemicals (+7% YoY) on account of higher import of fertilizers and plastic materials to meet local demand. On the other hand, exports rose by 2% YoY to USD 11.22bn during 1HFY19 on account of growing exports of Food Group (+3% YoY) and Petroleum (+65% YoY).
Exports increased by 5% YoY to USD 2.08bn
Latest data reveals that during Dec’18, exports increased by 5% YoY to USD 2.08bn compared to USD 1.97bn in SPLY. Textile exports, which comprise around 59% of total exports, remained stagnant (+1% YoY), whilst not contributing significantly to incremental exports.
Rather, the Food group (+10% YoY) and Petroleum Group (+83% YoY) remained major contributors towards the incremental exports. Exports under Food group increased due to higher receipts against Basmati Rice Exports (+47% YoY to USD 215mn), Fruits (+25% YoY to USD 72mn) and Oil seeds (+233% to USD 14mn). Food exports remained higher despite a 63% decline in sugar exports.
Exports under Petroleum Group increased due to lower offtake of crude condensate by domestic refineries. As a result, crude condensate is now being exported, therefore Petroleum exports are witnessing an increase.
During 1HFY19, exports registered a growth of 2% YoY to USD 11.22bn as compared to USD 10.98bn in SPLY. Key contributors to the improvement were Petroleum Group (+65% YoY), and Food Group (+3% YoY). Exports growth was led by Wheat (+2,161x YoY), Oil seeds & Nuts (+158% YoY), Petroleum Crude (+94% YoY), Vegetables (+43% YoY), Cements (+32% YoY), and Fruits (+23% YoY).
