ISLAMABAD: The trade deficit fell to an 11-month low in August 2024, signaling a positive shift for the country’s economy. Data from the Pakistan Bureau of Statistics (PBS) showed the deficit narrowed by 20.5 percent year-on-year to $1.68 billion from $2.11 billion in August last year.
The narrowing gap is attributed to a significant increase in exports coupled with a reduction in imports. Exports rose 18.9 percent to $2.74 billion in August from $2.31 billion in July. However, imports rose 4.9 percent to $4.42 billion, up from $4.21 billion in the previous month.
Compared to August 2023, exports increased by 15.93 percent and imports decreased by 1.25 percent. Last August, exports were $2.366 billion and imports were $4.474 billion. The monthly trade deficit, which stood at $1.9 billion in July 2024, also saw a 12 percent reduction ($1.675 billion) in August.
Cumulatively, the first two months of fiscal year 2025 (2MFY25) saw a trade deficit of $3.58 billion, down 4.2 percent from $3.7 billion in the same period in FY24. Analysts suggest that this improvement could herald economic stability, although challenges such as inflation and global market volatility continue to pose risks.
In the last fiscal year 2023-24, the country’s trade deficit decreased by 12.3 percent to $24.09 billion from $27.47 billion in fiscal year 23. However, during July 2023 to June 2024, total exports increased by 10.54 percent to $30.645 billion, while imports decreased by 0.84 percent to $54.73 billion.
Trade with services
PBS also announced services trade performance figures for July 24 – the first month of the 2024-25 financial year. According to international services trade statistics, during the month, local firms imported more services than they exported. During July 2024, the economy hired services from foreign companies for $780.5 million and exported services abroad for $621.5 million, with a trade deficit of $159 million. While in July 2023, imports were $849 million and exports were $588 million. Year-on-year, exports increased by 5.7 percent, while imports fell by 8.1 percent.
As a result, the trade deficit in services saw a decline of 39 percent to reach USD 159 million in July 2024 compared to USD 260.95 million in July 2023. In June 2024, services exports were valued at USD 637 million, while imports stood at USD 1.045 billion , resulting in a deficit of $408.8 million.
