As per the data released by Pakistan Bureau of Statistics, trade deficit stands at USD 1.47bn, down by 50% YoY and 35% MoM for the month of May’20. Exports for May’20 settled at USD 1.37bn, dropped by 33% YoY while up by 46% MoM due to smart lockdown which allowed industries to operate with Standard Operating Procedure (SOPs), coupled with lifting lockdown in various European countries. On the other hand, imports plummeted by 43% | 11% YoY I MoM to USD 2.86bn due to lower imports of transport, petroleum, other items and textile.
The decline in imports of Aircrafts, Ships & Boats and lower volumetric oil imports due to enforcement of lockdown resulted in closure of industries and lower demand of petroleum products. During 11MFY20, trade deficit clocked in at USD 21.1bn, down by 28% YoY compared to USD 29.2bn in 11MFY19.
This improvement in trade balance is due to meager decline in exports by 7% YoY to USD 19.8bn. Likewise imports witnessed a significant decline of 19% YoY to USD 40.9bn.
Meanwhile, impact of the novel Coronavirus is clearly evident in economic indicators, with GDP set to contract 0.4% (a first in 68 years) during FY20. However, the government’s efforts to curtail external imbalances have borne fruit as imports declined by 19% after raising policy rate to 13.25%, currency depreciation of 15% YoY and hike in regulatory and custom duties to discourage imports.