Trade deficit with regional states balloons 62pc
ISLAMABAD: The country’s trade deficit with nine neighbouring countries swelled by 62 per cent to $2.917 billion in the first quarter of the current fiscal year from $1.80bn.
Trade experts attributed the surge mainly to increased imports from China, India and Afghanistan.
Since the deficit rise remains unchanged from the previous fiscal year, it may cause policymakers big problems. In FY24, the trade deficit with these countries was $9.506bn, up 49pc from $6.382bn in the preceding fiscal year.
Exports to Afghanistan, Bangladesh and Sri Lanka saw an upward trend in the July-September period FY25, but exports to other countries, especially China in the region, continued to decline during the months under review, according to data compiled by the State Bank of Pakistan.
The value of Pakistan’s exports to nine countries — Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives — rose 8pc to $1.059 billion in July-September FY25 from $983.19m over the previous year.
Contrary to this, imports surged 43pc to $3.976bn in July-Sept FY25 from $2.783bn over the same period in the previous fiscal.
Further details show that imports from China grew by 42pc to $3.890bn in 3MFY25 from $2.744bn over the last year. In FY24, imports from China stood at $13.506bn — up by 39.78pc from $9.662bn over the previous year. The bulk of imports in the region are sourced from China, followed by India.
Pakistan’s exports to China dipped 12pc to $559.05m in 3MFY25 from $633.64m over the same month in the preceding financial year.
Pakistan’s imports from India increased 771pc to $57.480m in 3MFY25 from $6.599m over the last year. In FY24, imports from India rose 8.866pc to $206.89m — up from $190.04m in the same period last year. Meanwhile, exports to India remained at $0.277m in 3MFY25 against $0.044m over the last year.
Exports to India stood at $3.669m during FY24, as against $0.329m in the same period the previous year.
Prime Minister Shehbaz Sharif-led coalition government has repeatedly hinted at resuming commercial links with India. Pakistan has reduced diplomatic connections with India since August 2019, when the Indian government repealed Article 370 of the Constitution, removing the special status of India-held Kashmir.
The PTI-led government attempted to allow the import of sugar and yarn from India via a Wagha border to restore commerce with India. However, the then-opposition parties PML-N and PPP fiercely opposed the idea, and the decision was rescinded. Now, the same political parties in power are eager to resume commercial relations with India.
Exports to Afghanistan increased 55pc to $200.87m in 3MFY25 from $129.22m last year. Imports from Afghanistan stood at $6.38m in 3MFY25, as against $1.05m in 3MFY24.
No data available as most trade with Iran is conducted via informal channels.
Exports to Bangladesh increased by 30pc to $188.11m in 3MFY25. Imports also grew 8pc to $16.69m.
Exports to Sri Lanka surged 49pc to $108.62m in 3MFY25. Shipments to Nepal fell 29pc to $0.565m. Exports to Maldives rose 20pc to $2.35m in 3MFY25.
No trade was observed between Pakistan and Bhutan during the first quarter of the current fiscal year.
Published in Dawn, October 27th, 2024