Pakistan’s trade deficit has widened by 32.9 percent, or $7.616 billion, in the outgoing fiscal year 2020-21.
According to latest figures released by the Ministry of Commerce, the deficit was caused by lower export proceeds and higher than expected imports.
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 percent, or $11.517 billion, to $56.091 billion in FY21 from $44.574 billion over the corresponding months of last year.
In June 2021, the import bill reached an all-time high of $6.052 billion against $3.719 billion over the last year, indicating a growth of 62.7 percent.
On a month-on-month basis, the import bill increased by 14 percent.
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 $1.2 billion in the outgoing fiscal year.
Similarly, he said the import value for cotton stood at $1.2 billion due to shortage in domestic production while machinery imports stood at over $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 $30.796 billion in July-June FY21 from $23.180 billion over the corresponding period of last year. This may pose some challenges for the government in controlling external accounts.