Pakistan’s economy, the Pakistan Bureau of Statistics (PBS) has reported a 1.15% increase in exports, amounting to $2.465 billion in September 2023. This marks the first month of export growth in 11 months, breaking a prolonged period of economic challenges that had plagued the country. The growth, though modest, represents a noteworthy shift, given the preceding 11 consecutive months of year-on-year export reductions, ranging from 3.25% to a substantial 26.2%. This positive development also reflects a 4.2% increase compared to August 2023 when exports amounted to $2.366 billion, as outlined in the latest PBS report.
This reversal of fortunes began to emerge in August when the rate of export decline notably slowed to single digits after months of sharp declines dating back to October of the previous year. To provide context, export figures for October 2022 had seen a decline of 3.25%, followed by November with a reduction of 17.6%, December at 16.3%, January at 14.15%, February at 22.7%, March at 14.6%, April at 26.2%, May at 16.2%, June at 19.1%, and July at 8.09%. However, August 2023 witnessed a more modest drop of 4.7%, and finally, in September 2023, the tide turned with a 1.15% increase in exports.
On the other hand, imports recorded a substantial decrease of 25.3%, totaling $3.95 billion in September 2023 compared to the same period the previous year. This decline can be attributed to various factors, including lower oil prices, reduced demand for machinery and raw materials, and stringent import controls imposed by the government to manage the trade deficit. Additionally, on a monthly basis, imports fell by 12.7% from $4.5 billion in August 2023. Consequently, the trade deficit experienced a significant reduction of 47.9%, amounting to $1.49 billion in September 2023, compared to $2.86 billion in September 2022. In August 2023, the trade deficit had stood at $2.16 billion.
In terms of the broader economic picture for the first quarter of the current fiscal year (September 2023-24), exports witnessed a decline of 3.8%, reaching $6.9 billion, while imports saw a more substantial drop of 25.4%, totaling $12.2 billion, compared to the corresponding period in the previous fiscal year. Consequently, the trade deficit contracted by 42.15%, reducing to $5.29 billion in the first quarter of FY24 from $9.16 billion in the first quarter of FY23.
In the fiscal year 2022-23, Pakistan experienced a notable improvement in its trade deficit, which decreased by 43% to $27.55 billion from $48.35 billion in FY22. This was primarily due to a 12.7% dip in total exports to $27.7 billion and a more substantial 31% contraction in imports, which amounted to $55.3 billion.
Moreover, data revealed that the trade deficit in services expanded by 174%, reaching $463 million in July-August 2023-24, compared to $169 million during the same period in the previous fiscal year. This increase can be attributed to heightened demand for foreign services as the economy reopened. Over the two months of July and August 2023-24, Pakistan’s expenditure on foreign services reached $1.6 billion, with its services exports totaling $1.14 billion. In the same period the previous year, exports were valued at $1.1 billion, with imports amounting to $1.28 billion. Notably, during these two months, exports increased by 2%, while imports surged by 24.7%. In August 2023, services exports stood at $600 million, while imports reached $789 million, resulting in a deficit of $189 million.
The Press Club of India has expressed deep concern about these developments, and it’s worth noting that India has seen a decline in its World Press Freedom Index ranking, falling to 150th place from 140th in the previous year. However, the Indian government, led by Prime Minister Narendra Modi, disputes these findings, questioning the methodology employed by the ranking organization and emphasizing India’s vibrant and free press.
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