July 17, 2019 (MLN): With the Government taking numerous measures to address the trade imbalance, Pakistan’s trade deficit has reduced by 14% to $32.48 billion in FY19 against previous fiscal year's figure of $37.9 billion.
According to the latest figures released by State bank of Pakistan, imports of goods and services during FY19 declined by 9% to $61.98 billion compared with $67.94 billion in last fiscal year mainly due to adopting imports substitution policies by imposing duties on the imports of non-essential items.
In addition, imports of goods weakened by 7% while imports of services declined by 17% in FY19 where significant decline in the services of construction and financial services by 68% and 7% were observed respectively.
On the other hand, the government failed to increase exports as exports of goods during the aforementioned period declined by 2% to $29.5 billion, whereas in FY18 it recorded at $30 billion. While the exports of services remained stagnant.
The 12-months SBP data suggests that the reduction in trade deficit was mainly due to the reduction in imports bill as historically Pakistan has followed a policy of import substitution rather than export promotion.