- The monthly deficit also decreased by 17.7% from $1.82 billion.
- Exports showed strong monthly growth, rising by 10.64%.
- October data highlights a significant decline in imports.
ISLAMABAD: In a notable change that demonstrates the resilience of the economy, Pakistan’s trade deficit has shrunk significantly, falling by 31.1% year-on-year in October 2024.
The deficit shrank to $1.5 billion, down significantly from $2.17 billion in the same month of 2023-2024. News reported on Saturday.
This pattern indicates that the country’s external financial position is improving, especially with regard to the current account deficit, which has long been a source of economic weakness.
The monthly deficit also decreased by 17.7%, from $1.82 billion in September, according to Pakistan Bureau of Statistics data.
These gains offer some hope in the face of a difficult economic environment, as the cumulative trade deficit for the first four months of the 2024-25 fiscal year has already reached $6.97 billion, down 5.6% from the $7.39 billion recorded in the same period in 2023. -24.
There are several factors contributing to this shrinkage. On the one hand, strict government policies aimed at reducing foreign exchange restrictions have led to a significant decline in demand for imports.
In addition to reducing outward flows, these restrictions imposed a great deal of pressure on sectors of the economy that depend on imports.
In contrast, exports showed strong growth, rising by 10.64% in October 2024 to reach $2.975 billion. This represents the fourteenth consecutive month of rising exports, providing a much-needed balance to the shrinking trade deficit.
On an annual basis, exports have shown continued improvement since September 2023, with growth rates ranging between 1.67% and 29.27% in the months leading up to October 2024. When comparing October 2024 to September, exports increased by 4.9%, while imports decreased. By 3.9%.
October data highlights a significant decline in imports, which fell by 8.02% to $4.47 billion. This marks the first month since February 2024 in which imports declined, which contrasts sharply with previous months where imports rose, significantly by 63.2% in April. The government’s efforts to stabilize the rupee and manipulate the Canadian dollar played a pivotal role in this transformation.
In July-October 2024-25, cumulative exports rose by 13.45% to $10.88 billion, while imports rose by a more modest 5.17% to $17.85 billion, resulting in a trade deficit of $6.97 billion for these four months – down From $7.387 billion during the period from July to October 2024. The same period of the last fiscal year.
In addition, PBS reported on trade in services for the first quarter (July-September), revealing a deficit in trade in services. Pakistan imported services worth $2.6 billion while exporting $1.9 billion, resulting in a deficit of $698.9 million, an improvement from $893.3 million in the same time frame last year.
In September 2024 alone, services exports totaled $657 million, while imports amounted to $882 million, resulting in a deficit of $225 million. This represents a decrease of 20.5% compared to August, when the deficit reached $283.2 million.
On an annual basis, services exports in September 2024 rose by 17%, while imports decreased by 4%. This trend highlights the increasing efficiency in services exports, which is crucial to diversifying Pakistan’s economic portfolio.