Trade deficit decreases by 16% in August 2024
- By Usman Hanif -
- Sep 16, 2024
KARACHI: Pakistan’s trade deficit for August 2024 has decreased by 16%, amounting to USD 1.8 billion compared to the same period of last year.
This reduction in the trade deficit is attributed to the increase in exports and a relatively modest rise in imports. During the month under review, August 2024, exports surged to USD 2.8 billion, reflecting a 17% increase year on year and a 20% rise month on month, said Tahir Abbas Head of Research AHL.
This growth in exports for the period under review indicates a robust performance by Pakistan’s export sector, driven by higher demand for key commodities and improved market access. The increase in exports is a promising sign of economic resilience and competitiveness on the global stage.
On the other hand, imports for the month stood at USD 4.5 billion, marking a 1% increase year on year and an 8% rise month on month. While the growth in imports was relatively modest compared to exports, it underscores the ongoing demand for essential goods and services within the country, according to Tahir Abbas. The controlled increase in imports suggests effective measures to manage the inflow of goods while supporting domestic industries.
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For the first two months of the fiscal year 2025 (2MFY25), the trade deficit also showed improvement, decreasing by 1% year on year to USD 3.7 billion, said the head of research at AHL. This marginal reduction highlights the cumulative impact of the positive trade balance in August and the ongoing efforts to enhance export performance while managing import levels.
Analysts declare the reduction in the trade deficit is a welcome development for the economy, as it helps to alleviate pressure on foreign exchange reserves and supports the overall balance of payments. The government and relevant stakeholders are likely to continue focusing on policies that promote export growth and import substitution to sustain this positive trend.
Meanwhile, Large Scale Manufacturing Industries (LSMI) output also witnessed an increase of 2.4% year on year during Jul-24 while on month on monthly basis, it decreased by 2.1%.