UBG concerned at trade deficit widening with regional counterparts

KARACHI: United Business Group (UBG) leaders Zubair Tufail, President, Khalid Tawab, Regional chairman and Hanif Gohar, Secretary General expressed serious concern over the significant widening of Pakistan's trade deficit with its regional counterparts.

According to recent data from the State Bank of Pakistan (SBP), Pakistan's trade deficit with nine regional countries surged by 10.98 percent, reaching USD 5.415 billion in the first eight months of the current fiscal year, compared to USD 4.879 billion during the same period last year, the leaders added.

The increase in the trade deficit is primarily attributed to a surge in imports from China and India. The SBP report highlights that Pakistan's exports to China experienced a notable increase of 42 percent, reaching USD 1.895 billion from July to February 2024, compared to USD 1.334 billion during the corresponding period in the previous year.

However, Pakistan exports to China witnessed a decline of 27.3 percent in 2023, dropping from USD 2.78 billion to USD 2.02 billion.

Similarly, imports from China also saw a significant rise of 14.72 percent, totaling USD 8.105 billion in the first eight months of the current fiscal year, compared to USD 7.065 billion during the same period last year. Import from India surged by 10.47 percent to USD 238.72 million in 8MFY24, whereas exports to India remained stagnant at USD 0.23 million, compared to USD 0.161 million during the corresponding period last year.

Exports to Afghanistan experienced a decline of 7.68 percent, amounting to USD 319.88 million in 8MFY24, while exports to Bangladesh fell from USD 525.02 million to USD 421.94 million.

The UBG leaders said that widening trade deficit with regional partners poses a significant economic challenge, necessitating immediate attention and strategic measures to rectify the imbalance.

UBG leaders emphasised the importance of exploring avenues to boost exports and reduce dependency on imports, fostering a more balanced and sustainable trade relationship with regional countries.

Copyright Business Recorder, 2024