Trade deficit widens to $10.8b in first quarter

In absolute terms, the gap was $1.4 billion more than the last fiscal year, which was higher than the $1.2 billion tranche Pakistan will receive from the International Monetary Fund (IMF) in November.PBS said that cumulative exports during the first quarter increased to $8.4 billion, a surge of $824 million, or 10.8%, over the same period of the last year.

The pace of increase in exports was better than the previous months.

Data showed that imports jumped to $19.2 billion during the first quarter of FY27, higher by $2.2 billion, or 13.2%.Early this week, the federal government apprised the IMF that the continuation of tariff rationalisation under the National Tariff Policy would lower production costs and enhance industrial competitiveness.

It added that the allocation of Rs88 billion for concessional lending to exporters at 4.5% would improve liquidity, reduce financing costs and support export expansion.However, it is not for the first time the government has doled out fiscal benefits to the exporters.

They have availed themselves of these benefits without bringing any tangible improvement in non-debt creating receipts.

Exports have traditionally stuck in the range of $2.5 billion to $3 billion a month.

Even rupee devaluation of Rs100 per dollar could not give a major boost to exports.The government has now projected that during the current fiscal year exports of goods will be $34 billion compared with $30.8 billion in the last fiscal year.But given the first-quarter trend, the government's trade liberalisation policy has not helped increase exports, contrary to projections made by the Ministry of Commerce, the World Bank and the IMF.

Under the liberalisation policy, the commerce ministry and the World Bank had anticipated a 14% increase in exports and only a 7% surge in imports.

In the last fiscal year, exports plunged 6% to less than $31 billion.PBS data showed that on a month-on-month basis, exports increased 16% to $2.9 billion.

In absolute terms, they jumped $407 million in September compared to August this year.

Imports increased 11.5% on a monthly basis, reaching close to $6.5 billion.

The monthly trade deficit was up by 8%, or $263 million, which was better than earlier trends due to higher monthly exports, showed the official statistics.On an annual basis, imports increased 11%, or $646 million.

Compared to that, exports increased 17.6%, or $440 million.