Home General Trade deficit surges by 144 percent YoY to $4.229bn in Aug

Trade deficit surges by 144 percent YoY to $4.229bn in Aug

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ISLAMABAD: The country faced a trade deficit of $4.229 billion in the second month of the fiscal year 2021-22, which surged by 144.17 percent on a year-on-year (YoY) basis in August 2021 as compared to a deficit of $1.732 billion recorded in August 2020.
According to the data released by Pakistan Bureau of Statistics (PBS), the trade deficit on a month-on-month basis surged by 29.68 percent in August 2021 against a deficit of $3.261 billion recorded in July 2021.
The exports from the country witnessed an increase of 41.04 percent during August 2021 as compared to the corresponding month of last year. According to PBS data, the exports from the country stood at $2.231 billion during August 2021 against the exports of $1.584 billion recorded during August 2020.
According to the PBS data, the exports from the country witnessed a decrease of 4.53 percent during August 2021 as compared to the previous month, as exports remained $2.234 billion in August against exports of 2.340 billion in July 2021.
On the other hand, the imports into the country during the month under review also went up by 94.90 percent by growing from $3.316 billion in August 2020 to $6.463 billion in August 2021. Likewise, the imports into the country during August 2021 also witnessed 15.39 percent increase when compared to the imports of $5.610 billion in July 2021, according to the PBS data.
The reverse trend has been noted in the trade deficit for the second consecutive month. The trade deficit might cause pressure on the external side, but government officials believe that increase in remittances, growth in export proceeds and Roshan Digital Account will help mitigate the pressure to a large extent. The initial estimates show that the rising import bill might push the current account to a $10 billion deficit in the current fiscal year.
Exponential growth in imports is blamed for the reverse trend seen in the second consecutive month. The trade gap has been widening since December last year, mainly led by exponential growth in imports and comparatively slow growth in exports.
Trade deficit had reached an all-time high of $37.7 billion in the fiscal year 2017-18. However, the government’s measures led to a drop in trade deficit to $31.8 billion in 2018-19 and $23.183 billion in 2019-20. The trend reversed and the trade deficit was recorded at $30.796 billion in the fiscal year 2020-21. The trade gap has been widening since December 2020, mainly led by exponential growth in imports and comparatively slow growth in exports. – TLTP