What's new

Trade deficit peaks at $39.3 billion

maithil

SENIOR MEMBER
May 21, 2010
2,882
-76
1,802
Country
India
Location
India
Wide gap pushes govt to search for dollars amid reluctance to take tough decisions

ISLAMABAD:
Pakistan’s trade deficit crossed $39 billion in first 10 months of the current fiscal year, as the pace of increase in imports was double than the surge in exports, leaving the new government in search of dollars amid its weakening will to take tough policy decisions.

The $39.3 billion gap between exports and imports during July-April was $11 billion more than the estimate for fiscal year 2021-22, which still has two months left, showed the trade bulletin released by the Pakistan Bureau of Statistics (PBS) on Friday.

The 10-month trade deficit was $15.4 billion, or over two-thirds, more than the same period of previous year, according to the PBS.

In the last year of the previous PML-N government, the trade deficit had been recorded at $37 billion in 2018, which now at the start of its new term stands at a level that cannot be sustained due to the dearth of foreign exchange reserves.

The central bank’s foreign currency reserves were constantly on the decline and dipped further to $10.5 billion at the end of last month – not enough to cover two months of imports.

The PML-N-led coalition government has simultaneously begun the process to revive the stalled bailout package of the International Monetary Fund (IMF) and also seeks loans from Saudi Arabia and the United Arab Emirates (UAE).

However, so far it has not met with any success and deals with friendly countries and the IMF remain elusive.

The revival of the IMF programme requires the reversal of fuel subsidies that now stand at Rs102 billion per month – a decision that requires political courage but has not been exhibited by the new government.

The fate of IMF mission to Pakistan for programme revival talks hinges on the new government’s ability to take the needed measures.

Imports in July-April FY22 increased by nearly half to $65.5 billion. In absolute terms, imports grew $20.8 billion, according to the PBS.

The pace of increase in imports was not slowing down significantly, which has taken a heavy toll on the foreign exchange reserves

 

pikkuboss

FULL MEMBER
Jan 28, 2016
771
-12
891
Country
India
Location
India
That’s like $50bn trade deficit right there 😬
Wonder how do they sustain their economy this way
Yeah. India with 10 times the economy of Pakistan has 85 billion dollar Trade deficit which is equalled by remittances, still we bash our leaders left and right. Imagine India in the position of Pakistan.
 

pikkuboss

FULL MEMBER
Jan 28, 2016
771
-12
891
Country
India
Location
India
Take care of the rates, slow down the consumption.
That also means hike in interest rates. Pakistan right now needs loan from market. Hiking interest rates isn't in its interest. Also GDP growth will stop if you control price. Pakistan doesn't have enough Forex to make import cheaper either. Double edged sword.
 

pikkuboss

FULL MEMBER
Jan 28, 2016
771
-12
891
Country
India
Location
India
$32 billions are balanced out from remittances
Balancing out trade deficit with remittances isn't right economic approach. It stagnates growth. India has $85 billion trade deficit, remittances can equal it out. We recieve healthy amount of FDI. Still our govt doesn't show current account surplus and takes cheaper loans and issues bonds of the deficit.
 

Salza

ELITE MEMBER
Dec 20, 2014
9,209
-1
15,050
Country
Pakistan
Location
Pakistan
Remittances can compensate for it for some time only, it won’t grow as quick as imports.
Imports bill needs to be slashed down by $5 billions immediately. Increase in Oil and gas prices is not helping infact it is the main cause of heavy import bill.
 

AZ1

ELITE MEMBER
Jul 25, 2017
9,442
-1
10,180
Country
Pakistan
Location
Pakistan
Imran khan or shahbaz sharif is irrelavent at this moment. Cut down the trade bill simple.

Otherwise with this rate 2023-2024 default is coming
 

Black Tornado

SENIOR MEMBER
Jul 26, 2021
2,212
-9
2,298
Country
India
Location
Nepal
Yeah. India with 10 times the economy of Pakistan has 85 billion dollar Trade deficit which is equalled by remittances, still we bash our leaders left and right. Imagine India in the position of Pakistan.
It’s still high, we need to be a trade surplus country because remittances can’t save us for long and we should’nt be looking at loans to finance imports, that’s the worst we can imagine. Although FDI and remittances are alone making more than $150 bn but we still need to increase local value addition.
 

AZ1

ELITE MEMBER
Jul 25, 2017
9,442
-1
10,180
Country
Pakistan
Location
Pakistan
Imports bill needs to be slashed down by $5 billions immediately. Increase in Oil and gas prices is not helping infact it is the main cause of heavy import bill.
one thing I dont understand, IMF says increase price of oil but that would be in rupees so how IMF will get benefit for this why they ask for increase in rates while we have to pay back in dollars?
 

pikkuboss

FULL MEMBER
Jan 28, 2016
771
-12
891
Country
India
Location
India
It’s still high, we need to be a trade surplus country because remittances can’t save us for long and we should’nt be looking at loans to finance imports, that’s the worst we can imagine. Although FDI and remittances are alone making more than $150 bn but we still need to increase local value addition.
I think we are at a break out point right now. If oil prices cool down, we can become trade surplus with recent signing of FTA with UK, Aus, UAE.

It’s still high, we need to be a trade surplus country because remittances can’t save us for long and we should’nt be looking at loans to finance imports, that’s the worst we can imagine. Although FDI and remittances are alone making more than $150 bn but we still need to increase local value addition.
Yes, remittances are at the cost of brain drain. We can only take steps when our current account is no longer dependent on remittances. Let's see in next 2-3 years I am expecting a balanced export-import.
 

AZ1

ELITE MEMBER
Jul 25, 2017
9,442
-1
10,180
Country
Pakistan
Location
Pakistan
Ukraine Russia war has been detrimental to countries like Pakistan.
Cut down import or go on imrannkhan path this shows what imrannkhan was going to do for pakistan

import oil bill monthly $1.8B. yearly around $21B. Get oil from russia 30% will save $6.5B yearly that is our IMF program for 3 years.
 

Users Who Are Viewing This Thread (Total: 1, Members: 0, Guests: 1)


Top Bottom