Pakistan trade deficit narrows for first time in eight months

November 18, 2024 (MLN): Pakistan's trade deficit narrowed for the time in eight months, as the growth in exports was higher than imports

The deficit on trade in goods narrowed 4.7% to $1.59 billion in October compared to last year. The shortfall was $23.4bn in the 12 months through October, State Bank of Pakistan reported Monday.

Goods imports rose by 5.1% to $4.61bn during the month, taking the twelve month rolling imports to $55.22bn.

Exports of goods increased by 11.1% to $3.02bn during October, taking the twelve month tally to $31.8bn.

Since the second half of FY24, the trade deficit has continued to expand. Both imports and exports are rising, with imports increasing at a faster pace due to a relaxation in import restrictions and recovering domestic economic activity.

Meanwhile, robust growth in remittances has allowed the country to sustain modest growth. Remittances in October increased by 23.9% to $3.05bn as against $2.46bn in October 2023. Cumulatively in 4MFY25, remittances were recorded at $11.85bn as compared to $8.8bn in 4MFY24, depicting a rise of 34.7%.

Pakistan's current account has posted a surplus for the third consecutive month driven by robust growth in remittances and exports, which more than offset the increase in imports.

The gap in current account, the broadest measure of trade and investment, showed a surplus of $349m in October. On a cumulative basis, the current account surplus in 4MFY25 was recorded at $218m, compared to the deficit of $1.53bn in 4MFY24.

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