At the end of the five-year term of Pakistan Muslim League (PML-N) led government, Pakistan’s trade deficit reached all-time high at $37.6 billion from $20.4 billion in Fiscal Year 2017-18.
Before PML-N’s government, exports from Pakistan stood at $24.5 billion by the end of FY13, while the import bill of the country was recorded at $44.9 billion.
It is to be noted that Pakistan acquired the GDP plus status from the European Union in December 2013, granting member states duty-free access to 96 percent of Pakistani exports to the European Union (EU).
The State Bank of Pakistan (SBP) said that Pakistani exporters benefited less compared to the other countries.
Meanwhile, Pakistani exports rose by 13.74 percent in FY18 from a year ago, boosted by higher shipments of textiles, food items and POL products, data from Pakistan Bureau of Statistics (PBS) showed Wednesday.
However, the country largely missed the export target of $35 billion, which the federal government had set in the three-year Strategic Trade Policy Framework 2016-18.
Despite strengthening export growth and decelerating import growth, Pakistan’s trade deficit reached a historic high of $ 37.6 billion in FY18 from $32.4 billion in the preceding fiscal year. A broad-based increase in export quantum was overshadowed by an upsurge in import quantum, with higher commodity prices further aggravating the situation.
According to the data of PBS, the country’s exports showed 13.74 percent growth to $23.2 billion in FY18, as compared to $20.4 billion in FY16. Similarly, import bill surged by 15.10 percent, as the total import receipts of the country settled at $60.8 billion in FY18 while it was $ 52.9 in previous fiscal.
The SBP in its third quarterly report for FY18 said three major factors explain the growth in multiple exporting sectors. First, higher domestic production of cotton, rice and sugar, and surplus wheat stock, ensured that the country had exportable surplus available this year.
In case of textiles, Pakistani exporters to the EU were able to make most out of the dual advantage of the Pakistani rupee depreciation against the Euro and the zero-duty access under GDP Plus.
Moreover, a strengthening consumer demand in the US, as reflected by growing share of consumption in real GDP growth and rising retail sales of clothing and accessories has boosted the demand for clothing imports in the country.