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Pakistan’s Trade Deficit Shrinks to $3.6 Billion in Early FY25
Pakistan’s trade deficit has shown a slight improvement, narrowing to $3.6 billion during the first two months of the fiscal year 2024-25 (2MFY25), according to recent data from the Pakistan Bureau of Statistics (PBS). This decrease is largely attributed to a significant boost in exports.
Trade Balance Overview
The trade balance, which represents the gap between exports and imports, stood at a deficit of $3.58 billion for the July-August 2024-25 period. This marks a modest decline from the $3.74 billion deficit recorded during the same period in the previous year.
Export Performance: A 14% Increase
Pakistan’s export sector delivered a strong performance in the first two months of FY25, with exports surging by 14% to reach $5.05 billion. This is a notable increase from the $4.43 billion recorded in the corresponding period of the previous year.
Imports Rise by 5.67%
On the import side, there was a 5.67% increase, bringing total imports to $8.63 billion during the 2MFY25 period. This is up from the $8.17 billion in imports during the same timeframe last year.
Monthly Trade Figures: A Detailed Look
The PBS report highlighted a significant decline in the trade deficit on a year-on-year basis for August 2024. The deficit dropped by 20.54%, falling to $1.68 billion from $2.11 billion in August of the previous year. This reduction is primarily due to strong growth in exports, which rose by 15.93% to $2.74 billion compared to $2.37 billion in August 2023.
Import and Export Trends in August 2024
In August 2024, imports slightly decreased by 1.25%, totaling $4.42 billion, down from $4.47 billion in the same month the previous year. On a month-on-month basis, the trade deficit also declined by 12.03%, dropping to $1.68 billion from $1.9 billion in July 2024.
Conclusion: A Mixed Outlook for Pakistan’s Economy
While the shrinking trade deficit and rising exports are positive signs for Pakistan’s economy, the increase in imports poses a challenge. The continued growth in exports will be crucial in balancing the trade deficit and supporting economic stability in the coming months.
