Pakistan’s trade deficit widens by 32.9 per cent in FY21

Islamabad [Pakistan], July 3 (ANI): Already burdened by high inflation, rising food prices, raised electricity charges, Pakistan’s trade deficit widened by 32.9 per cent, or USD 7.616 billion, in the outgoing fiscal year (FY21).

The deficit was caused by lower export proceeds and higher than expected imports, shared the Ministry of Commerce data on Thursday, reported Dawn.

The trade gap has been widening since December 2020, mainly led by exponential growth in imports and comparatively slow growth in exports. The annual import bill went up by 25.8 per cent, or USD 11.517 billion, to USD 56.091 billion in FY21 from USD 44.574 billion over the corresponding months of last year.

In June 2021, the import bill reached an all-time high of USD 6.052 billion against USD 3.719 billion over the last year month, indicating a growth of 62.7 per cent. On a month-on-month basis, the import bill increased by 14 per cent.

Adviser on Commerce Razak Dawood told a news conference that the import bill increased mainly due to wheat and sugar imports. He said the import value of wheat and sugar stood at USD 1.2 billion in the outgoing fiscal year, reported Dawn.

Similarly, he said the import value for cotton stood at USD 1.2 billion due to shortage in domestic production while machinery imports stood at over USD 8 billion — an indication of expansion in the industrial base.

The import bill is also rising mainly due to the increased imports of petroleum, soybean, machinery, raw material and chemicals, mobile phones, fertilisers, tyres and antibiotics and vaccines.

The annual trade deficit reached USD 30.796 billion in July-June FY21 from USD 23.180 billion over the corresponding period of last year. This may pose some challenges for the government in controlling external accounts, reported Dawn. (ANI)