Islamabad (HRNW)- Pakistan’s trade deficit increased by 18 percent to $7.1 billion during the first two months of the current fiscal year, mainly due to imports growing at nearly twice the pace of exports, according to data from the Pakistan Bureau of Statistics (PBS).
The deficit increased by $1.1 billion compared with the same period last year, while imports reached $12.6 billion, registering a 13 percent increase. Exports, after rising to around $3 billion in July, fell back to approximately $2.5 billion in August.
The widening deficit comes as Pakistan continues to rely heavily on foreign borrowing to meet its external financing needs. The government recently secured a $3 billion loan from the international capital market for five-and-a-half to 10 years, carrying an estimated interest rate of 7.9 to 8.25 percent at current market rates.
Exporters have attributed stagnant exports partly to the appreciation of the Pakistani rupee, which they say is hurting export competitiveness. Despite government incentives, concessional financing and other support measures, exports have yet to show significant growth.
The report also highlights concerns over the impact of the National Tariff Policy, under which imports have increased faster than exports. The government is undertaking reforms in taxation, energy and other sectors, but stronger export growth and non-debt foreign investment remain important for improving Pakistan’s external position.
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