Wednesday, August 17, 2022

Pakistan’s Trade Deficit down by 5% in 1HFY19, 26-month low


Zain Zubair
Zain Zubair is a staff writer for World News Observer. He is studying ACCA in Pakistan. Besides Accountancy and writing pieces, he loves cooking and nature photography. Zain has attended various modern journalism workshops. Contact: [email protected]
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).



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