Trade gap with nine regional states widens

ISLAMABAD: Pakistan’s trade deficit with the nine regional countries widened by 10.98 per cent to $5.415 billion in the first eight months of the current fiscal year from $4.879bn over the corresponding period of last year.

The trade deficit is mainly driven by an increase in imports from China and India during the period under review. Exports to regional countries, particularly China increased over the review period but exports to other regional countries remained negative, according to data compiled by the State Bank.

In absolute terms, the value of Pakistan’s exports to the nine regional countries — Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives — rose 20.58pc to $2.911bn between July and February 2023-24 from $2.414bn over the corresponding months of last year.

Imports from China and India rise in July-February period

Contrary to this, imports saw an increase of 14.16pc to $8.326bn in 8MFY24 from $7.293bn over the corresponding period of last year. This shows a slight increase in trade deficit with maximum countries in FY24.

Pakistan’s bulk of the regional exports, which accounts for over 60pc, go to China while the rest to the remaining eight countries.

Exports to China increased 42pc to $1.895bn in July-February FY24 from $1.334bn over the corresponding period last year. In FY23, the exports to China declined 27.3pc to $2.02bn from $2.78bn in FY22. It was the first decrease in the post-Covid period.

The imports from China also increased by 14.72pc to $8.105bn in 8MFY24 from $7.065bn over the corresponding months of last year. The bulk of imports in the region is also sourced from China followed by India.

Pakistan’s imports from India increased by 10.47pc to $138.72 million in 8MFY24 compared to $125.57m in the same period last year. Exports to India stood at $0.23m pc this year compared to $0.161m during the same period last year.

Exports to Afghanistan dipped 7.68pc to $319.88m in 8MFY24 from $346.52m last year.

A very negligible export was made to Iran in 8MFY24. Most of the trade with Tehran is carried out through informal channels.

Exports to Bangladesh fell 19.63pc to $421.94m from $525.02m. Imports also dipped 27pc to $38.77m from $53.26m in 8MFY23. Exports to Sri Lanka surged 32.3pc to $266.16m. Imports rose to $38.73m from $35.34m. Shipments to Nepal rose 5.36pc to $2.16m in 8MFY24. Shipments to the Maldives increased 11.96pc to $5.99m from $5.35m.