Pakistan’s trade deficit hits record-high of $48.66 billion as imports soar

The trade deficit reached an alarming level despite a ban on more than 800 non-essential luxury items in May by the Shehbaz Sharif government

: Cash-strapped Pakistan’s trade deficit has surged to an all-time high of $48.66 billion in the outgoing fiscal year, up from $30.96 billion a year ago, a significant 57% jump on the back of higher-than-expected imports, a media report said on Sunday.

The trade deficit reached an alarming level despite a ban on more than 800 non-essential luxury items in May by the Shehbaz Sharif government, the Dawn newspaper reported, quoting the provisional official data.

Pakistan’s trade gap widened by more than 32% to touch $4.84 billion in June, from $3.66 billion a year ago, driven largely by almost double the increase in imports compared to exports, the paper said.

The outgoing fiscal year’s trade deficit has crossed the $37 billion figure in 2017-18, which was largely led by imports related to the China-Pakistan Economic Corridor.

In the subsequent years, the trade gap dropped to $31.8 billion in 2018-19 and then to $23.2 billion in 2019-20, before bouncing back to $30.8 billion in 2020-21 and finally to a whopping $48.64 billion in the 2021-22 fiscal, according to official data.

The outgoing year’s trade deficit is propelled by the highest-ever increase in oil prices and commodities in the international market due to the supply chain disruptions brought about due to the ongoing war in Ukraine.

The trade deficit has been on the rise owing to an unprecedented increase in imports due to a rise in global commodity prices, while exports have stagnated to around $2.5 billion to $2.8 billion a month, mostly those of semi-finished products and raw materials, the paper added.