Trade deficit with Gulf nations narrows

ISLAMABAD: Pakistan’s trade deficit with the Middle East narrowed 41.31 per cent to $5.674 billion in the first seven months of the current fiscal year mainly due to low imports of petroleum products from the region.

In absolute terms, the value of Pakistan’s exports to the Middle East rose 36.18pc to $1.769bn between July and January 2023-24 while imports dipped 31.69pc to $7.443bn, showing a massive contraction in trade deficit to $5.674bn from $9.668bn in the same period last year, according to data compiled by the State Bank of Pakistan (SBP).

The exports stood at $1.229bn while imports totalled $10.897bn in January-July FY23.

The government has recently signed a free trade agreement with the Gulf Cooperation Council (GCC) states which was aimed to minimise the trade balance with the region.

Exports surge 36pc to $1.8bn while imports plunge to $7.4bn in July-January

A surge in demand for Pakistani products was observed from countries like the United Arab Emirates, Saudi Arabia and Kuwait.

Pakistan witnessed a 7.24pc decline in imports totalling $17.488bn in FY23, down from $18.853bn in the preceding year.

In FY23, exports to the Middle East shrank 12.62pc to $2.332bn from $2.669bn in the preceding year.

Exports to Saudi Arabia rose 50.29pc in 7MFY24 to $386.20m from $256.96m in 7MFY23. At the same time, imports from Saudi Arabia also increased by 37.62pc to $2.78bn in 7MFY24 against $2.02bn in the same period last year.

Exports to the UAE surged 42pc to $1.169bn in 7MFY24 from $821.59m over 7MFY23 primarily attributed to a significant rise in exports to Dubai. The majority of these exports were directed towards Dubai, amounting to $952.77m this year, compared to $746.64m during the same period last year, indicating an increase of 27.6pc.

Pakistan’s top export products to UAE include rice, bovine carcasses and half carcasses, men’s/boys’ cotton ensembles, guavas, mangoes, etc.

Contrary to this the imports from UAE declined by 29.28pc to $3.574bn in 7MFY24 against $5.054bn over the corresponding period of last year.

Exports to Kuwait rose 3.96pc to $74.65m in 7MFY24 from $71.80m over the corresponding months of last year. The imports from Kuwait declined by 32pc to $1.008bn during the period under review against $1.483bn over the corresponding period of last year.

Pakistan’s exports to Qatar declined 10.31pc to $97.31m from $108.50m during FY23. The imports from Qatar also declined by 20.94pc to $1.85bn this year against $2.34bn over the corresponding period of last year.

Exports to Bahrain increased by 4.69pc to $42.18m in 7MFY24 from $40.29m over the corresponding last year. The import from Bahrain declined by 65.27pc to $101.97bn this year against $293.61m over the corresponding period of last year.