Pakistan’s trade deficit widened by 21.03 percent to $2.601 billion inJanuary 2021 from $2.149 billion compared with the same month last year,according to the data released by the Pakistan Bureau of Statistics.
This sharp worsening is mainly due to surging duty-free imports. This isthe second consecutive month when the trade deficit has swelled, whichhints at recovering the consumption economy.
An increase in export also means a recovering global economy andimprovement in domestic production.——————————
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During the first seven months of the fiscal year 2021 (FY210), i.e., July2020 to January 2021, the trade deficit increased by 8.27 percent to $14.96billion from $13.82 billion in the corresponding period last year.
In December 2020, Pakistan’s trade deficit had widened by 32.04 percent to$2.683 billion as compared to $2.032 billion in December 2019.
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The country’s imports have been rising since September 2020. The duty-freeimport value was recorded an unprecedented growth of 80 percent in Decemberwhile it grew by 30 percent in January.
In the July-January period of 2020-21, the duty-free imports witnessed anincrease of 27 percent in terms of dollars compared to the previous year,while the share of duty-free imports also surged 42 percent in overallimports in the seven months in concern. This is up from 35 percent over thesame period last year.
As a result of this increase in January, the import bill also went up by14.85 percent year-on-year to $4.73 billion against $4.121 billion over thecorresponding month last year.
Last year, the cost of imports had witnessed a steep decline of $10.29billion, or 18.78 percent, to $44.509 billion, compared to $54.799 billionin the year before.
