YoY: Pakistan’s trade deficit shrinks 43% to $27.6bn in FY23

Pakistan’s trade deficit narrowed 42.9% to $27.59 billion in FY23 mainly due to a massive reduction in imports, a direct result of administratively-controlled inward shipments.

The country’s trade balance, the gap between exports and imports, was recorded at a deficit of $27.59 billion in July to June period of the year 2022-23 as compared to $48.35 billion in the same period of the previous year, according to the latest data of Pakistan Bureau of Statistics (PBS).

Both exports and imports reduced in the period under review. However, imports fell more than exports, which has reduced the trade deficit. During FY23, the federal government and the State Bank of Pakistan imposed restrictions on imports.

During FY23, Pakistan’s exports reduced by 12.7% to $27.73 billion from $31.78 billion in the corresponding period of the previous year despite witnessing massive currency depreciation.

The currency depreciated by over Rs85 against the dollar in the last 12 months. However, exports did not show an improvement.

On the other hand, imports fell by 31% to $55.33 billion in the July to June period, down from $80.13 billion in the same period of FY22.

Monthly figures

According to the PBS, the country’s trade deficit shrunk by 62.3% to $1.863 billion in June 2023 from $4.945 billion in the same period of the last year.

Exports declined 19.1% to $2.356 billion in June 2023 from $2.911 billion in June of the previous year. Similarly, imports reduced by 46.3% to $4.219 billion in June 2023 from $7.85 billion in the same month last year.

On a monthly basis, the trade deficit declined by 12.4%, as compared to $2.128 billion in May 2023.

The data showed exports increased 7.1% to $2.356 billion in June from $2.2 billion in the preceding month of May. Meanwhile, imports have reduced by 2.5% to $4.219 billion from $4.328 billion in the last month.