Pakistan has witnessed all-time high trade deficit $37.67 billion in the previous financial year (FY2017-18) due to uncontrolled and increasing imports as compared to exports.
Pakistan’s trade deficit is increased by 15.95 percent in just one year which is an alarming situation for the economy. The total trade deficit was recorded at $37.67 billion during the fiscal year FY2017-18 against $32.49 billion which was recorded in the previous corresponding year according to Pakistan Bureau of Statistics (PBS).
Pakistan has now reached the highest level of trade deficit of all times.
The previous government initially set the target for the trade deficit to $25.7 billion which was not achieved at the first place, the government revised the target and set it to $29.4 billion to be the maximum but it even crossed the revised figures due to massive imports which government didn’t control as it should.
Since the trade deficit has widened it also impacts adversely the current account deficit and the foreign currency reserves.
On the other hand, current account deficit is also expected to hit $16 billion during the current fiscal year FY2018-19 and the government’s target is to keep the deficit below $9 million which is even harder to achieve due to the current economic situation.
Pakistan has imported products and services worth $60.9 billion during the FY17-18 against the $52.9 as the previous corresponding year, an increase of 15.1 percent was recorded in one year. This is the first time in the history that Pakistan’s imports have hit $60 billion level; the imports are increasing in capital goods, food products, and petroleum products.
Pakistan’s exports have also increased but not enough to bring down the deficit, during the fiscal year FY2017-18, Pakistan recorded exports at $23.2 billion during the FY2017-18 as compared to previous period which recorded $20.4 billion, there was an increase of 13.74 percent, but the major problem is the rupee depreciation which elevated the total exports figures, in other words, the country was unable to make significant achievement in exports.