The trade deficit of the country widened by 21.6% to $23.83 billion in the 10 months of the fiscal year 2020-21 which was $19.59 billion during the same period in the last financial year.
The import bill of Pakistan is constantly increasing due to the import of items like wheat, sugar, soybean, machinery, raw material and chemical, mobiles, fertilizers, tyres, antibiotics, and vaccines.
According to the data, released by the Pakistan Bureau of Statistics, the trade deficit has been increasing since December 2020. There has been a constant growth in imports and a decline in exports.
In April 2021, the trade deficit rose by 33.24% to $2.99 billion as compare red to $2.24 billion during the same month, last year. The import bill in April 2021 was $5.18 billion as compared to $3.20 billion during the same month, last year.
On a month-on-month basis, the import bill decreased by 8.34. Between July and April of this fiscal year, the import bill increased by 17.67% to $44.706 billion as compared to $37.992 billion during the same months, last year.
The decrease in the imports during the first two years was source of relief for this government to manage the external accounts despite the decrease in exports too. Now the upward movement of the imports may create a problem for the government.
However, the increasing foreign remittances would be a sign of relief to meet the import bill. It is expected that the current deficit in this fiscal year may fall from $4 billion to $6 billion by the end of the year. There was growth of export year-on-year basis which was 129.74 % to $2.19 billion in April from$0.99 billion as compared to the last year.
On a month-on-month basis, the exports came down by 7.23 %. This decline may be problematic. The value-added sector has warned the government that there could be possible shortage of raw materials in near future. They have asked the government to give permission for duty-free import of cotton and cotton yarn.