February 22, 2019 (MLN): Pakistan’s terms of trade have not only been adverse, but have also deteriorated over the years, which has unfavorably impacted the economy in terms of growth and balance of payments.
After taking the office, the new government was faced with the challenge of growing current account deficit, for which the government began to set their plans in motion, by instructing the State Bank of Pakistan to adjust the exchange rates and raising regulatory duties on non-essential items.
This move has dramatically reduced Pakistan’s import bill, as the imports in the month of January declined by 10% YoY and 3% MoM. While cumulatively (Jul-Jan) FY19 it exhibited a negligible increase of 1% YoY.
The data released by SBP shows that Pakistan’s imports are highly concentrated in few countries.
During Jul- Jan FY19, around 55 percent of the imports continued to originate from the countries like, China, UAE, Singapore, Saudi Arabia and USA.
During the period under study, China emerged as the major import origin for Pakistan as the total Chinese imports amounted to US$5.9 billion (19%), followed by imports from UAE worth US$ 5.8 billion (18%), Singapore US$2.2 billion (7%), Saudi Arabia US$1.79 billion (6%) and USA US$1.13 billion (4%).
During the said period, Pakistan’s imports from China, UK, Singapore and Japan declined by 9%, 12%, 18% and 10% respectively, whereas imports from India, Malaysia, USA, Switzerland and South Korea increased by 17%, 9%, 8%, 21%, and 9% respectively against the corresponding period last year.
