The government’s lax policy for imports has already started showing its impact on the currency and current account deficit by turning it into the red….reports Asian Lite News
Due to the COVID-19 pandemic surge in Pakistan, the July trade deficit touched USD 3.10 billion in the first month of the new financial year.
Pakistan Bureau of Statistics (PBS) on Monday reported that the July trade deficit figure was 85.53 per cent more than what the economy accumulated (USD 1.673 billion) in the same month a year ago, reported The News International.
This deficit figure was around USD 800 million more than the value of products it sold abroad during July 2021, whereas, the imports were more than double of exports during the month.
Exports were recorded at USD 2.33 billion while imports stood at USD 5.434 billion, this huge deficit trend, economists believe could put some pressure on the country’s balance of payment and exchange rate in months to come, reported The News International.
The government’s lax policy for imports has already started showing its impact on the currency and current account deficit by turning it into the red.
It is interesting to note that since mid-May 2021, the Pakistani rupee has been shedding its worth. On Monday alone, it lost 45 paisa or 0.27 per cent against the greenback and closed at Rs 163.90– the lowest level since October 7, 2021. The rupee has devalued by 3.9 per cent since July 1, 2021, to date, and 7.1 per cent since its recent high of Rs 152.28 recorded on May 14, 2021.
Imports during the first month of FY22 were recorded at USD 5.434 billion as against USD 6.35 billion in June 2021, down 14.45 per cent, while over July 2020 (USD 3.674 billion), it was up by 47.9 per cent.
During the last fiscal 2020-21, the economy witnessed a trade deficit of USD 31.1 billion, which was 34.3 per cent more than what was recorded in FY2019-20 (USD 23.159 billion).
Meanwhile, Pakistan’s international trade deficit in services reduced by around half during the financial year 2020-21 over the financial year 2019-20, however it is still revealing that Pakistani companies have been taking more foreign services than what it offers in the international market, reported The News International.
During FY21, the services trade was recorded at a deficit (exports-imports) of USD 1.875 billion against USD 3.316 billion in FY20, depicting a reduction in the deficit of 43.45 per cent. (ANI)