ISLAMABAD: Pakistan exported goods worth $2.23 billion in March, a figure the Ministry of Commerce said was the highest level in four years, reflecting a massive year-on-year increase of 24.4% or $437 million when compared with the amount in March 2017.
However, the trade deficit still widened 17.3% year-on-year to $27.3 billion in the cumulative nine-month period, surpassing the amount projected for the entire fiscal year, suggesting that worries for economic managers is far from over.
Pakistan has booked the $27.3-billion trade deficit in nine months, but exports have lately started to pick up on the back of combination of administrative and policy actions, said the commerce ministry in a statement released on Monday.
After a gap of four years, exports have peaked to $2.23 billion in March, which the government claimed was the result of recent administrative and policy actions.
The trade deficit, gap between exports and imports during July-March period, was equal to 106% of the government’s annual target of $25.7 billion, showed official statistics that Pakistan Bureau of Statistics (PBS) released on Monday. The higher-than-officially-projected trade deficit in just nine months will have adverse implications for both the current account deficit and foreign currency reserves.
The value of goods imported exceeded the value of those exported by $27.3 billion in the nine-month period, reported the national data collection agency. Exports in July-March increased by 13.14% to slightly over $17 billion but these were only equal to 74% of the annual export target of $23.1 billion. In absolute terms, export receipts were up by $2 billion during the first nine months.
The value of imports stood at $44.4 billon, which was 15.7% or $6 billion higher than the import bill booked during the first nine months of the last fiscal year. The nine-month import bill was equal to 91% of the annual target.
Export receipts are still 260% less than the import bill in the first nine months. The higher trade deficit is on an already higher base, as Pakistan had closed the last fiscal year at a record $32.4-billion deficit.
Pakistan is expected to book a current account deficit of around $16 billion during the current fiscal year 2017-18 – against the government’s target of $9 billion. This will have direct implications for foreign currency reserves that have slipped to $11.7 billion by end of March.
The federal government has taken a number of measures including levying regulatory duties on hundreds of tariff lines and more importantly, devaluing the rupee by 10% against the US dollar to curb imports. These measures have started to bear fruit, but authorities say they expected more.
Annualised data
On a year-on-year basis, Pakistan’s exports grew to $2.23 billion in March over the same month of the previous fiscal year, according to the PBS. Exports were higher by 24.4% or $437 million over the receipts of March 2017.
The initiatives by the government to provide duty drawback as well as exchange range adjustments have contributed positively to the 24.4% growth in exports, according to the Ministry of Commerce. It added improved market access especially in the European markets owing to the successful review of GSP Plus facility also played an important role.
Imports grew by only 6% and the country booked $5.3 billion import bill in March. The import bill was $303 million more than that of March 2017. The ministry stated that imports are now finding their real value by improved exchange rate regime and regulatory duties on non-essential and luxury goods. However, imports remained under pressure due to continuation of oil prices on the higher side, it added.
The increase in fuels imports (oil, coal and LNG), both in terms of price as well as quantities, kept the balance of trade around $3 billion in March 2018, said the commerce ministry. The $3-billion trade deficit was 4.2% or $134 million less than the previous year.
Monthly results
On a month-on-month basis, exports March increased 17.3% to $2.23 billion over February. Exports were $329 million higher than the receipts in the preceding month. Imports in March increased 10.1% over February. The month-on-month trade deficit was this time up by 5.3% or $154 million.
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