Pakistan’s trade deficit decreased by 40.68% on a year-on-year basis to $2.857 billion in December 2022. Data released by the Pakistan Bureau of Statistics (PBS) showed that the trade deficit in December 2021 was $4.816 billion.
The reason for the decrease in the trade deficit is a significant decrease in domestic imports, which stood at 5.161 billion dollars. It is 31.91% less than last December’s 7.58 billion dollars.
The decline was marked by restrictions on imports, imposed by the State Bank of Pakistan in May. The SBP made the restrictions to avoid a depreciation of the country’s foreign exchange reserves and the rupee and to curb dollar outflows.
Apart from imports, the State Bank of Pakistan also imposed restrictions on raw material items for exports, which resulted in a drop in exports last month.
According to the statistics of the Pakistan Bureau of Statistics, total exports in December were 2.304 billion dollars, which is 16.64% less than the 2.764 billion dollars in December last year. Following the announcement, the central bank lifted the restrictions on January 2, citing shortages of raw materials due to delayed imports.
On a month-on-month basis, the trade deficit widened by 2.36 percent, due to a decline in exports of 3.64 percent. The imports also saw a slight increase of 0.41 percent.
The trade deficit narrowed to 32.65 percent during the first half of the current fiscal year compared to July-December 2021, data from the Bureau of Statistics showed. During the last 6 months, the volume of exports and imports was 14.249 billion dollars and 31.382 billion dollars respectively, which shows a decrease of 5.79% and 22.63% compared to the same period last year.