KARACHI, Jul 17: Pakistan’s merchandise trade deficit surged by 10.68 per cent to $22.095 billion in 2014-15 from $19.963 billion in the preceding fiscal year, according to the data of Pakistan Bureau of Statistics.
Exports have been witnessing a falling trend since July 2014. However, imports rebounded which was reflected in higher volumes of machinery, food products, transport, agriculture, chemicals and textile groups.
The government has projected a trade deficit target of $17.2 billion for the fiscal year.
An official report reveals that the trade deficit witnessed in 2014-15 was the highest since 1980-81. The second highest trade deficit was recorded at $21.271 billion in 2011-12, mainly driven by imports of consumer goods and higher international crude prices.
The import bill reached $45.98 billion in 2014-15 as compared to $45.073 billion in the previous year, an increase of 2.01pc. Its target for the year was projected at $44.2 billion. In June 2015, the imports volume reached $4.394 billion as compared to $4.318 billion in the same month last year, an increase of 1.76pc.
Monthly imports, during the year, averaged at $3.8 billion as compared to $3.758 billion in 2013-14. Around 50pc of Pakistan imports were originated from just a few countries like China, Kuwait, Saudi Arabia, UAE, India, Indonesia, etc.
During the fiscal year, imports from China increased sharply to 23pc from 17pc a year ago.
The trade imbalance in favour of China is highly alarming. Free Trade Agreements signed with some of the countries appear to have been playing a major role for this imbalance. By and large, the relative shares of imports from other countries have remained almost the same.
On the other hand, exports fell by 4.88pc to $23.885 billion during the period under review as compared to $25.11 billion a year ago, the highest ever export figure recorded as of yet. In June 2015, the export proceeds fell to $2.016 billion as against $2.018 billion in the same month last year.
Monthly exports averaged at $1.997 billion as against $2.098 billion during 2013-14.
The country’s exports have been stagnant at $24-25 billion for the last few years.
According to a UN study, covering a 30-year period (1980-2011), India’s share of world exports improved from 0.43pc to 1.7pc; Bangladesh’s from 0.04pc to 0.14pc; Malaysia’s from 0.74pc to 1.34pc and Thailand’s from 0.37pc to 1.35pc.
Pakistan’s share, however, remained stagnant at 0.15pc.
Since January 2014, when duty-free access to the European Union under the GSP+ scheme was granted, Pakistan’s exports to Europe spiked by 21pc, but this was at the cost of other markets.
Pakistan’s exports base and markets are extremely narrow.
Over 55pc of its exports earnings are contributed by the cotton group alone. Leather, synthetic made-ups and rice contribute about 14pc of total exports. Unfortunately, these items are relatively low value-added products.