- Deficit reduces due to sharp decrease in imports
Pakistan's trade deficit contracted 20% to $2.88 billion on a monthly basis in September 2022 led by a sharp decline in imports. As per provisional data released by the Pakistan Bureau of Statistics (PBS) on Tuesday, imports recorded a 20% reduction on a year-on-year basis and 13% on a monthly basis.
The data revealed imports clocked in at $5.27 billion in September 2022 compared to $6.56 billion in the same month of previous year. On the other hand, exports recorded a marginal decline as they fell from $2.4 billion September 2021 to $2.39 billion in September 2022.
On a month-on-month basis, trade deficit fell 20% as it amounted to $3.59 billion in August 2022. Imports during August stood at $6.07 billion, while exports remained $2.48 billion.
Speaking to Business Recorder, Ismail Iqbal Securities Head of Research Fahad Rauf said the contraction in trade deficit comes primarily on the back of fall in imports.
“Although the breakup is not available yet, however, it seems that the decline in import bill came due to drop in oil imports,” he said. “Oil consumption fell in Pakistan following sharp hikes in petrol prices over the past few months. On the other hand, Pakistan had ample oil inventory at the start of September and therefore, oil imports stayed low throughout the month.”
Apart from this, there is a general slowdown in the economy which is reflected from fall in imports, he added.
Arif Habib Limited Head of Research Tahir Abbas told Business Recorder that exports remained stagnant as they witnessed 1% decrease, however, imports saw a massive drop.
He added that trade deficit narrowed down due to overall economic slowdown and drop in global commodity prices,
Trade figures are crucial for Pakistan as they reflect the flow of dollars that determine pressure on the local currency.
On Tuesday, the rupee maintained its winning momentum against the US dollar for the eighth successive session, closing over 0.7% higher in the inter-bank market.