ISLAMABAD:Pakistan’s trade deficit marginally expanded to $5.4 billion in the first quarter of the current fiscal year due to a double-digit growth in exports and a constant check on imports, which helped keep foreign exchange reserves at $10.5 billion.
Exports continued their upward movement as they crossed the $2.8 billion mark in September for the first time in the past four months, according to the data released by the Pakistan Bureau of Statistics (PBS).
Merchandise goods export jumped to $7.9 billion during the first quarter (July-September), higher by $974 million, or 14.1%, over the same period of last fiscal year.
The net increase in exports during the quarter was almost equal to the fresh loan tranche of $1.02 billion that Pakistan received from the International Monetary Fund (IMF) at an interest rate of around 5%.
There has been a healthy momentum in exports and remittances from overseas Pakistanis during the current fiscal year – the two most critical non-debt creating sources of foreign inflows. This provides an additional cushion of at least $600 million per month to the government, which is still sitting on thin foreign exchange reserves.
After the IMF’s fresh injection, the gross official foreign exchange reserves have reached around $10.5 billion. However, they are still below the minimum threshold that can provide three months of import cover.
Imports grew nearly 10%, or $1.2 billion, in the first quarter and stood at $13.3 billion, stated the national data collecting agency.Trade deficit widened 4.2% to $5.4 billion in the first three months of current fiscal year 2024-25, a rise of only $224 million largely because of a jump in exports.
The pace of increase in the deficit was far slower than previous years due to a relatively better performance of exports and a constant check on imports.In the last fiscal year, rice exports had significantly contributed to Pakistan’s total exports. But India has now lifted the ban on its rice exports.
Global prices for different varieties of rice have dropped this week after India and Pakistan made competing moves by abolishing price caps and resuming exports. Last week, India scrapped the ban on export of non-Basmati white rice, which came more than a year after it blocked overseas sales.
