A major reason for the reduction in the country’s trade deficit during the previous fiscal year (FY23) was the restrictions imposed on imports.

Pakistan’s trade imbalance, the difference between exports and imports, was $27.547 billion in 2022-23, down from $48.354 billion last year, according to the latest statistics from the Pakistan Bureau of Statistics (PBS). As a result of the review period, both exports and imports have decreased. In spite of this, imports have dropped more than exports, resulting in a reduction in the trade deficit. State Bank of Pakistan (SBP) and the federal government imposed conditions on imports to improve balance of payments. It would help control the current account deficit, which has recently recorded a surplus, if the trade deficit were reduced.

Last year, Pakistan’s exports declined by 12.71 percent to $27.74 billion, down from $31.78 billion the previous year (FY22). One year ago, the rupee depreciated by more than 100 paise against the dollar. Although exports have improved, they have not kept pace with imports. Meanwhile, imports declined by 31 percent from $80.136 billion in the previous fiscal year to $55.29 billion in the current fiscal year.

In June 2023, the nation’s trade deficit shrank by 63.32 percent to $1.814 billion from $4.946 billion in the same month last year, according to the PBS. In June 2023, exports decreased 18.72 percent from $2.911 billion in May of last year to $2.366 billion. In June 2023, imports decreased by 46.8 percent to $4.18 billion from $7.857 billion in June 2012.

The monthly trade imbalance increased to $1.814 billion in June 2023 from $2.128 billion in May, representing a 14.76 percent increase. In June, exports reached $2.366 billion, up 7.55 percent from $2.2 billion in May this year. In the meantime, imports decreased 3.42 percent from $4.328 billion to $4.18 billion.