Trade gap with nine regional states widens
ISLAMABAD: Pakistan’s trade deficit with nine neighbouring countries widened by 47.55 per cent to $4.474 billion in the first five months of the current fiscal year from $3.032bn in the corresponding period last year.
Trade analysts attributed the widening gap to higher imports from China and India. During the months under review, China’s imports increased the most, while Pakistan’s exports to the same country decreased.
In contrast to last year, exports to Afghanistan, Bangladesh, and Sri Lanka increased unusually. This growth has largely offset the decline in exports to China.
The soaring deficit may cause policymakers big problems. In FY24, the trade deficit with these countries was $9.506bn, up 49pc from $6.382bn in the preceding year.
Exports to Afghanistan, Bangladesh, and Sri Lanka saw an upward trend in the July-November of FY25. Still, exports to other countries, especially China, continued to decline during the period, according to data compiled by the State Bank of Pakistan.
The value of Pakistan’s exports to nine countries — Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives — rose 5.99pc to $1.962bn in July-November FY25 from $1.851bn over the previous year.
Contrary to this, imports surged 31.8pc to $6.436bn in 5MFY25 from $4.883bn over the same period in the previous fiscal year.
Further details show that imports from China grew by 32.40pc to $6.276bn in 5MFY25 from $4.740bn over the last year. In FY24, imports from China stood at $13.506bn — up by 39.78pc from $9.662bn over the previous year. The bulk of imports in the region are sourced from China, followed partially by India.
Pakistan’s exports to China dipped 13.9pc to $1.053bn in 5MFY25 from $1.223bn over the same months in the preceding fiscal year.
Imports from India increased 6.19pc to $94.78m in 5MFY25 from $88.91m over the last year. In FY24, imports from India rose 8.866pc to $206.89m — up from $190.04m in the same period last year. Meanwhile, exports to India remained at $0.375m in 5MFY25 against $0.069m over the last year.
Exports to India stood at $3.669m in FY24 against $0.329m in the same period the previous year.
Exports to Afghanistan increased 73.37pc to $406.67m in 5MFY25 from $234.56m last year. Imports stood at $8.53m against $3.18m in 5MFY24.
No data is available as most trade with Iran is conducted via informal channels. However, Pakistan has opted for barter trade amid the thriving smuggling of Iranian petroleum products and LPG via a porous border of Balochistan.
Exports to Bangladesh increased by 29.76pc to $313.99m in 5MFY25 from $241.96m. Imports grew 18pc to $30.75m in 5MFY from $26.06m over the last year. The increase resulted after the toppling of the Hasina government in Dhaka.
Exports to Sri Lanka surged 25.3pc to $183.89m in 5MFY25 from $146.75m over the last year. This surge in exports to Sri Lanka occurred following the recovery of economic activity after the recession. Shipments to Nepal fell 34pc to $0.96m from $0.054m over the last year. Exports to Maldives rose 5.74pc to $4.0m in 5MFY25 from $3.83m over the last year.
No trade was observed between Pakistan and Bhutan during the first five months of the current fiscal year.
Published in Dawn, December 26th, 2024