July-December trade deficit shrinks 32.65% to $17.13 billion

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July December trade deficit

Islamabad: The trade deficit of Pakistan shrank 32.65% to clock in at $17.13 billion during the first six months (July-December) of the current fiscal year compared to the same period last year when it had amounted to $25.438 billion, the Pakistan Bureau of Statistics (PBS) reported.

According to the monthly statistics by PBS on trade, a massive cut was observed in imports in line with the steps taken by the incumbent government to ease the pressure on import bills during the first six months of FY23. Imports amounted to $31.382 billion during the period, as compared to the $40.463 billion that had been recorded during the same period last year.

Exports, however, also fell during the time to clock in at $14.249 billion from $15.125 billion recorded last year.

In December alone, the trade deficit shrank 40.68% on a year-on-year basis, as the trade imbalance amounted to $2.857 billion compared to the $4.816 billion that was recorded last year.

On a month-on-month basis, however, the trade imbalance rose slightly by 2.36%.

It is pertinent to mention that the trade deficit of Pakistan had recorded a whopping increase of 55.7% during the fiscal year 2022, taking the total imbalance between imports and exports to $48.38 billion.

However, the recent steps taken by the government to ban the import of unessential items have proved to be a remedy to decrease the pressure of trade imbalance.

Pakistan’s current account deficit shrinks 57% YoY in Jul-Nov

At the same time, Pakistan’s current account deficit (CAD) has shrunk 57% on a year-on-year basis during the first five months of the current fiscal year, the State Bank of Pakistan (SBP) reported last month.

According to the central bank, during the period, the current account recorded a deficit of $3.1 billion in FY23 compared to a deficit of $7.23 billion in FY22, showing a decline of $4.135 billion.

The SBP attributed the sharp decline in the current account deficit to a visible decline in imports as the exports remained “broadly unchanged”.