Weakening of Petroleum and Auto Imports, key factors for shrinking trade deficit

December 26, 2019 (MLN): The declining trend in the trade deficit has now continued for eleven months in a row, is homage to the corrective measures taken in conjunction with the IMF to bring about an improvement in the country’s external account and foreign exchange reserves, says a research report by JS Global.

The report further raises a question that despite several measures taken by the government to lift up exports, it still has not shown a meaningful recovery as during Jul-Nov 2019, it only inched up by 5%YoY.

However, it remains to be seen whether the China-Pakistan FTA (CPFTA-II) along with other measures to boost exports materializes in significant improvement in exports, the report highlighted.

The report further underscored that imports on the other hand witnessed double digit decline in both during 5MFY20 and during 11MCY19 by 21% and 19% YoY respectively. In addition, in the month of November alone, it contracted by 13% YoY mainly due to significant reduction in petroleum and transport imports by 28% and 53% YoY respectively.

Moving towards cheaper fuel sources due to decline in overall economic activity were the major driving factors for the reduction in petroleum imports, the report added.

Copyright Mettis Link News