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Trade deficit dips 37pc in March 2019

ISLAMABAD: Pakistan trade deficit has shrunk by 14 percent to 23.45 billion in the first nine months of the current fiscal year from $27.29 billion last year.

Soon after coming into power the incumbent government took a number of measures to control the swelling trade deficit. It seems the government efforts have yielded fruits as the latest figures show the deficit has shrunk.

The decline in deficit — down $3.84bn in the July-March period — is estimated to be in the range of $5-6bn at the end of the ongoing fiscal year. This contraction is mainly attributable to a steep fall in overall import bill even though export proceeds posted a mixed trend during the period under review.

On a month-on-month basis, the trade deficit fell by 37.74pc to $1.93bn in March from $3.1bn over the corresponding month last year.

Official figures show that the country’s exports fell by 4.54pc in March; making it the second consecutive month in which export proceeds have posted a decline. In absolute terms, the exports fell to $2.1bn in March from $2.2bn over the corresponding month last year. In February, exports edged lower by 0.37pc year-on-year to $1.88bn.

The massive 33pc rupee devaluation since July, 2018 coupled with cash assistance to major sectors, mainly textile and clothing wasn’t enough to boost the country’s exports as they grew by a marginal 1.05pc to $17.21bn during the July-March period 2018-19, from $17.03bn in the corresponding period last year.

The government had earlier claimed that the impact of currency devaluation will be visible in the export trajectory, anticipating a pickup in foreign sales and a steep decline in imports during the months ahead.

The value of imported goods in the nine-month period was recorded at $40.66bn, down 8.25pc, from $44.32bn. The decline was even steeper in March, falling by 23.96pc to $4.03bn, from $5.3bn in the same month last year.