File photo. Frederic J. Brown—AFP
Pakistan’s trade deficit has increased to a record $43.33 billion during the first 11 months of the ongoing fiscal, an alarming boost of 57.85 percent year-on-year, largely due to higher-than-expected imports, according to data issued by the Pakistan Bureau of Statistics (PBS).
The 11-month deficit is already significantly more than the previously highest recorded trade deficit of $37 billion—in 2018—when the Pakistan Muslim League (Nawaz) government was concluding its tenure. That deficit was linked to imports related to China-Pakistan Economic Corridor, while this year’s is being largely attributed to the impact of oil prices in the international market.
The trade deficit for May was $4.04 billion, growing by 6.9 percent over April, and by 11.5 percent compared to the same period last year. The import bill for the past month was $6.64 billion, up from $5.29 billion over May 2021, an increase of 25.43 percent; however, imports decreased by a nominal 0.52 percent from April.
The government imposed a ban on the import of nearly 800 luxury and non-essential goods late last month, which has not yet been fully reflected in the data. Its impact, if any, would be visible in data issued next month.
The overall import bill increased by 44.28 percent to $72.18 billion during the first 11 months of the current fiscal, up from $50.02 billion during the same period last year. By contrast, the overall exports revenue was recorded at $28.84 billion in the first 11 months of the fiscal year, a 27.78 percent increase from $22.57 billion last year.
However, exports declined 10.22 percent between April and May. The government hopes to achieve export revenue of $2.6 billion in June.
The trade deficit has been continuously rising this year, with government officials blaming it on an increase in the import bill, caused by mounting global commodity prices. The government has also been unable to boost exports, which have struggled to push past $2.8 billion a month.