Arresting the soaring trade deficit

The robust increase in exports is often regarded as one of the biggest achievements of the government by different ministers, and rightly so. But the positive impact of double-digit increase in exports is being offset by the surge in imports. In fiscal year 2018-19, when the current PTI government came to power, Pakistan recorded exports of $22.96 billion, as per data of the Pakistan Bureau of Statistics (PBS), which depicted a drop of 1.1% from 2017-18. Exports fell again to $21.39 billion in the following year but climbed to the record high of $25.3 billion in 2020-21. Now, it seems that exports may rise further to another all-time high of more than $30 billion in the current fiscal year. For the first seven months of FY22, the PBS has reported exports of $17.67 billion, showing a strong growth of nearly 24% from $14.26 billion in the same period a year earlier. The seven-month export number translates into an annualised figure of $30.3 billion. However, if one looks at the import data, the outlook doesn’t appear that rosy anymore. Imports for the first seven months came in at $46.47 billion, depicting a strong growth of 59% year-on-year.