ISLAMABAD: Pakistan reached a historic high trade deficit of $32.9 billion dollars after increasing by 49.6 percent in the outgoing fiscal year 2021-22.
Minister for Finance and Revenue Miftah Ismail launched the Pakistan Economic Survey on the performance of the economy.
According to the survey, the COVID-19 pandemic disrupted economic activity worldwide. However, many policy measures were initiated to support export-oriented industries and facilitate firms to increase export earnings.
During July-April FY2022, goods exports grew by 27.6 percent to US$26.8 billion, whereas services exports grew by 18.2 percent to US$5.8 billion.
Around two-thirds of the increase came from the textile sector, especially from the high value-added segment.
Textile exporters capitalied on the policy support including Export Facilitation Scheme 2021, SBP’s concessionary refinances schemes, regionally competitive energy tariffs and managed to ship higher volumes to key destinations such as the US, UK, and EU.
The higher cotton prices also helped increase the export unit prices of both low and high-value-added textile products.
Apart from textiles, rice exports also rebounded during July-April FY2022, mainly on the back of the non-basmati variety.
Despite the encouraging export performance, the country’s imports have also risen significantly. The surge in global commodity prices, COVID-19 vaccine imports, and demand-side pressures, all contributed to the rising imports.
Resultantly, the trade deficit grew by 49.6 percent to US$ 32.9 billion which is historically high. The current account deficit was recorded at US$ 13.8 billion.
Remittances were recorded at US$ 26.1 billion during July-April FY2022 and posted a growth growth of 7.6 percent. However, the highest ever worker’s remittances still not sufficient to offset the trade deficit.
Further, the low performance of the Financial Account during the period not only resulted in the depletion of foreign reserves but also brought the exchange rate under
The interbank PKR-USD exchange rate 15.1 percent during July-April FY2022. The SBP’s foreign exchange reserves also came under pressure, dropping from US$5.9 billion during the review period to US$10.5 billion by end April 2022.
