India’s Diwali, Pakistan’s bankruptcy! In 4 months, a neighbor suffered a major loss

According to a media report on Saturday, Pakistan’s trade deficit widened by 16 percent to nearly US$15 billion in the first four months of this fiscal year. According to the report, during this period Pakistan’s exports witnessed a sharp decline and imports increased to 26 billion US dollars. ‘The Express Tribune’ on Friday quoted the Pakistan Bureau of Statistics (PBS) as saying that the gap between imports and exports widened to US $ 14.6 billion between July and October. This is US $2 billion or 16 percent more than the same period last year.

Imports increased by how much?

According to official data, imports rose to US$26 billion in the first four months, up US$2.9 billion or 12.5 percent from last year. The central bank has estimated that total imports could rise to US$ 71 billion this fiscal year due to the increase in the energy import bill. PBS reported that total exports rose to US$11.4 billion from July to October, an increase of just US$890 million or 8.5 percent over the same period last year.

Subsidy provision of PKR 88 billion

The report said that the government has made all efforts to increase exports to a level that would reduce dependence on foreign lenders. In this fiscal year’s budget, the government has provided a subsidy of 88 billion Pakistani rupees (PKR) to provide cheap loans to large exporters. Monthly exports typically hover around US$2.5 billion to US$3 billion and despite the Pakistani rupee depreciating by around 100 against the dollar, there has been no major jump in exports.

What are the estimated exports?

According to the central bank, the Pakistani rupee strengthened by a paise to PKR 276.66 per dollar on Friday. The government has estimated exports of goods to be US$ 34 billion this fiscal year, compared to US$ 30.8 billion last year. If this pace continues, Pakistan will not be able to achieve the US $60 billion export target set for 2029. The main reasons for this large deficit are: a large increase in imports (an average of US$6.5 billion per month) and a slowdown in exports (an average of US$2.8 billion per month). Planning Minister Ahsan Iqbal had earlier said that taking exports to US$ 60 billion is a pre-condition for avoiding any IMF program in future.