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Trade deficit shrinks by over $2b in first seven months of FY2018-19

Trade deficit shrinks by over $2b in first seven months of FY2018-19

ISLAMABAD: Pakistan’s trade deficit plunged by 9.66 per cent to $19.26 billion during the first seven months of the current fiscal, as compared to the same period last year.

Data released by the Pakistan Bureau of Statistics (PBS) on Monday showed the trade deficit contracted by over $2 billion to $19.264 billion in the July-January period of 2018-19 against a deficit of $21.32 billion during the corresponding months last year.

Exports increased by 2.24pc to $13.23 billion during the period under review from $12.94 billion in the same period of 2017-18.

Meanwhile, imports declined by 5.17pc to $32.49 billion from $34.27 billion in the first seven months.

A statement issued by the Ministry of Commerce said that its interventions to effectively control the fast-widening trade deficit have started delivering positive results.

It said in the month of January 2019 alone, the trade deficit plunged by $1.14 billion. In January, imports declined by $1.07 billion (19pc) while exports rose by 4pc.

Imports have started declining due to a number of policy interventions by the government that include import contraction measures like regulatory duties on non-essential items, improved energy supply, import substitution, economic stabilisation and currency devaluation.

Imports of non-essential consumer items have declined as a result of regulatory duties. In January 2019, imports of products that are subject to regulatory duties declined by 16pc. Import of power generation equipment too has declined by $724 million.

After the restriction imposed on the import of furnace oil, its imports fell from 3 million MT to 0.4 million MT. The growth in exports over the seven months was driven by a number of items.

Exports of articles of apparel increased by $306 million; copper and footwear also registered healthy growth. Cement exports have shown a 50pc increase in July-January.

Agricultural exports including wheat, rice, citrus, ethanol, dates, and potatoes also increased by $248 million.