Trade deficit shrinks by 30% in January

ISLAMABAD: February 02, Spokesperson Ministry of Finance Muzzammil Aslam addressing in a press conference. APP

ISLAMABAD, Feb 2 (APP): The country’s trade deficit shrank by 30.19% to US$ 3.36 billion in January 2022 against the deficit of $4.8 billion in December 2021.

“Our import bill which was recorded at US$7.6 billion last month (December 2021) had declined to $5.9 bn in January, 2022, showing a decline of 22%,” Spokesman for the Finance Minister, Muzammil Aslam said while addressing a press conference here on Wednesday.

He said the exports also declined by 8% during the period under review but overall the trade deficit showed a big decline.

On year-on-year basis, Pakistan’s exports witnessed increase of 18.7% as it rose to $2.54 billion in January this year compared to $2.1 billion in same month of previous year. The imports during the month also increased by 23% to $5.9 billion from $4.8 billion in January 2021 while the trade deficit during the corresponding period rose by 26% .

On average, the exports during first seven months (Jul-Jan) of fiscal year 2021-22 surged to $17.7 billion against $14.255 billion in same period of previous year, showing an increase of 24%.

The imports also rose to $46 billion from $29.2 billion in Jul-Jan (2020-21) showing an increase of 58%. Whereas the trade deficit rose sharply to $28 billion during the period under review, thus showing an increase of 92%.

Muzammil Aslam said during previous few months, the unprecedented increase in the import bill was mainly due to import of COVID vaccine, sugar, and wheat. He however said that since these commodities would not be imported now so there would not be any sudden increase in the imports.

He said at present the country had surplus stock of sugar and wheat, so there was no need of their import.
Further he said the inflation in the country had reached at its peak now and it would decline in the months to come along with imports and trade deficit.

The spokesman said such situation was create in 2008 too when prices in the international market rose sharply but then government did a major mistake by depleting the country’s foreign exchange reserves to maintain the currency value.

On the other hand, he said that now due to rational approach especially by the State Bank of Pakistan (SBP), the country’s reserves did not went down which were on historical higher side and the exchange rate too did not lose its value as much as it was expected.

The spokesman said prices of perishable items in the country were on the declining trend, while unlike during the last year, wheat flour price was also stable this year. Similarly, prices of eggs, chicken, tomatoes, and fresh vegetables were also stable.

He said despite the historical crisis, the current government had to face in the shape of COVID pandemic and then hike in the the global inflation, the government managed to stabilize the key macroeconomic indicators.