Pakistan’s trade deficit in August narrowed by 27 percent from the same period in 2021, Finance Minister Miftah Ismail said on Thursday.
Imports fell by 13% in August while exports gained 13%, narrowing the monthly trade deficit slightly more than expected. “The trade deficit stood at $3.2 billion in August,” the minister said in a tweet.
He said that “as per the Federal Board of Revenue (FBR), imports in August were $5.7 billion, which were down by 13% from the same period last year.
The minister said energy imports were up 5% to $2 billion while non-energy imports were down 21% to $3.6 billion.
The exports were $2.5 billion, up by 13%, the trade deficit was $3.2 billion, down by 27%, and remittances were up 2% to $2.7 billion, the finance minister shared.
“The exports plus remittances [are] still shy of imports but we will get there,” the minister said.
Miftah said this became possible due to the government’s decision to curb imports, further easing pressure on the current account balance.
However, the State Bank of Pakistan (SBP) and the Pakistan Bureau of Statistics (PBS) are yet to post their August data.
Analysts said data indicates that the import compression measures taken by the government have firmly taken hold and are now effectively curtailing imports as per the policy regime of the government.
The government had in May banned imports of all non-essential luxury goods to avert a balance of payments crisis after the central bank reserves had fallen as low as $7.8 billion.
The country’s major imports including fuel, edible oil, and pulses were exempted from the ban.
Imports fell by more than a third in July after a ban on non-essentials goods. July imports fell to $5 billion, down 35% from June’s record monthly high of $7.7 billion.
Last month the government lifted the ban, except for automobiles, cell phones, and home appliances. But such items were heavily taxed. The government imposed a series of regulatory duties on a number of items to slow imports.
Analysts said the trade balance has also benefited from a fall in global oil prices which has eased pressure on the hefty import bill of the country — a net energy importer.
In the last fiscal year, the trade deficit had surged to an all-time high of $48.66 billion, up from $30.96 billion a year ago, a significant 57% jump on the back of higher-than-expected imports.