Pakistan’s trade deficit shrinks to $1.58 billion in November

Pakistan’s trade deficit has shrunk in November, due to strict import control measures which were put in place earlier this fiscal year.

In November, Pakistan's trade deficit decreased to $1.58 billion, down 18.6% from $1.95 billion in the same month last year, data from the Pakistan Bureau of Statistics showed.

Exports were $2.8 billion, which was 5.97% lower than in October, while imports stood at $4.4 billion, a decrease of 3.83% from the previous month. This led to a trade deficit of $1.58 billion.

Compared to October, exports fell by 5.97%, and imports decreased by 3.83%. The trade deficit saw a slight increase of 0.43% in rupees and 0.19% in dollars.

From July to November, Pakistan's total exports were $13.7 billion, while total imports reached $22.3 billion. This resulted in a trade deficit of $8.65 billion. During the same period in 2023, exports had risen by 12.57%, while imports had a slight increase of 3.90%. Overall, the trade deficit decreased by 7.39%.

An analyst at KTrade mentioned that a 40% reduction in oil prices, assuming demand remains unchanged, could turn the deficit into a surplus. If Pakistan could access cheaper energy from Iran or Russia, it might have been enough to bridge the trade deficit.

However, this strategy may not be viable due to geopolitical implications. This also shows that if the oil price supply shock from the Ukraine war ends, Pakistan’s economy could stabilize. Building foreign exchange reserves is the only defense strategy against external economic shocks.