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A huge increase in imports and a decrease in exports at the same time has brought Pakistan’s trade deficit to an astounding $30 billion, with one month still remaining before the end of the fiscal year 2017. As announced by the Pakistan Bureau of Statistics, there has been a difference of $29.9 billion between imports and exports during the period between May and July in the current fiscal year. This amount is estimated to be 42% more as compared to the same period of the previous fiscal year.

Pakistan’s trade deficit has been constantly breaking records month by month. By far, this is the third consecutive month the record has been broken as trade deficit stood at $30 billion.

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Increased Imports

The main reason behind this increased amount is the swift increase in imports as they were recorded to be at $5 billion this year. $20.5 billion has been the targeted trade-gap set by the Ministry of Finance in fiscal year 2017. However, the current trade gap is exactly $9.5 billion higher than the annual target.

All of these factors have raised questions about the continuity of the import sector as it is also being sustained by the government through loans from banks and foreign countries. Other than that, the import-industry is being disturbed due to cheap imports.

The trade deficit has increased to an amount so huge that the country’s financial balance might get to a point where no one even expected it to be in the first place. As compared to the previous fiscal year, the exports of fiscal year 2017 have decreased by 3.1% to an amount of $18.5 billion. On the other hand, imports increased to an amount of $48.53 billion. This amount was estimated to be $8.3 billion higher than that of previous year.

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Decreased Exports

As compared to the annual target of $24.8 billion, exports have been recorded to be only three-fourth of the targeted amount. Pakistan’s imports have been recorded to be 260% higher than the exports of the country. Even though Pakistan has duty free access to exports to the European Union, exports of the country have contributed to a meager amount of only 6% to the country’s GDP. According to economists, the exports of the country should contribute to at least 10% of the GDP for the sustainability of the external sector of the country. Even with decreased exports, one-fourth of the export receipts of the country were used in the external debt servicing. Sadly, 2017 is going to be the fourth consecutive year the government will miss its annual export target.

Imports have increased consecutively for months and they in turn have affected the trade deficit of the country. Pakistan’s trade deficit has been recorded to be $3.5 billion in May which was $1.3 billion more as compared to the previous year. Increase in imports and a parallel decrease in exports has been the major factor in the increase of the trade deficit of Pakistan.