July-May trade deficit up 29.5pc YoY

 The country’s trade deficit increased by 29.5 percent to $ 27.275 billion during the first 11 months (July-May) 2020-21 as compared to $ 21.065 billion in the corresponding period of FY 2019-20.

However, exports posted a growth of 14 percent to $ 22.563 billion during first 11 months (July-May) 2020-21 as compared to $ 19.801 billion in the corresponding period of 2019-20.

According to figures released by Commerce Ministry, exports on cumulative basis rose by $2.762 billion during the first 11 months of outgoing financial year.

In May 2021, exports showed an increase of 18.7 percent to $1.657 billion as compared to $1.396 billion in May 2020. However, exports in May declined by 25 per cent as compared to April 2021.

In April 2021 volume of exports was $2.219 billion. The dip in exports to below $2 billion maybe due to extended EID holidays to curtail the spread of COVID.

However, country’s imports have witnessed growth of 22 per cent to $ 49.839 billion during July-May 202-21 against $ 40.866 billion in same period 2019-20. This implies that trade deficit of eleven months increased by 29.5 per cent or $ 27.275 billion against $ 21.065 billion showing a difference of $ 6.210 billion.

In May 2021, imports grew by 77.8 per cent to $ 5.090 billion against $ 2.863 billion. Trade deficit in May recorded a growth of 134 per cent to $ 3.432 billion in May 2021 as compared to $ 1.965 billion in May 2020.

Talking to Business Recorder, Prime Minister Advisor on Commerce and Investment, Abdul Razak Dawood said that the country is now importing cotton, prices of raw materials and oil have gone up due to which imports are showing increase.

Since the country is facing a huge shortfall in cotton, its import has touched $ 2 billion.

“The main reason for the increase in imports is that machinery is being purchased in addition to raw cotton and raw materials which are being used for ex-export,” said Razak Dawood. The trade figures of July-May 2020-21 indicate that Pakistan may achieve $ 25 billion mark in exports – comparable to 2013 exports.