In a contrasting development, the SBP reported a modest increase in its foreign exchange reserves, as of July 26, 2024, reserves rose by $75 million, or 0.83pc, reaching a total of $9.1 billion
By Nasir Dehlvi
KARACHI: Trade data for July 2024, the initial month of the current financial year, highlights a concerning expansion in Pakistan’s trade deficit, as reported by the Pakistan Bureau of Statistics. The trade deficit surged by 19.7 percent year-on-year, reaching $1.95 billion compared to $1.63 billion in July 2023.
In July 2024, Pakistan’s exports totaled $2.308 billion, representing an 11.83 percent increase from the previous year. Despite this year-on-year growth, there was a notable month-on-month decline of 9.77 percent from June 2024, when exports were recorded at $2.55 billion. This decrease in export activity suggests challenges in maintaining consistent growth and highlights potential areas of concern for trade policymakers.
On the import side, the country saw a significant rise of 15.30 percent in July, with imports amounting to $4.25 billion compared to the previous year. However, month-on-month figures indicate a decrease in imports, which fell by 14.27 percent from $4.96 billion in June 2024. This decline could signal a potential easing of the trade deficit in the short term, though the overall increase in import activity remains a key factor in the widening deficit.
The expanding trade deficit reflects both heightened import activity and ongoing challenges in sustaining export growth. This trend underscores the need for strategic measures to balance trade and address underlying economic issues. In a contrasting development, the State Bank of Pakistan (SBP) reported a modest increase in its foreign exchange reserves. As of July 26, 2024, reserves rose by $75 million, or 0.83 percent, reaching a total of $9.1 billion. This positive shift follows a period of stable fluctuations in the country’s foreign reserves.
Additionally, the cumulative figure for Pakistan’s total reserves saw a slight increase of $56.3 million, or 0.39 percent, bringing the total to $14.39 billion. The increase in foreign exchange reserves provides a measure of relief and stability amidst the broader economic challenges. It reflects a degree of resilience in Pakistan’s financial position, offering some support against the backdrop of a widening trade deficit.
The July 2024 trade data presents a mixed economic picture for Pakistan. While the widening trade deficit and fluctuating export-import figures highlight ongoing challenges, the modest increase in foreign exchange reserves offers a glimmer of stability. Addressing the trade imbalance and sustaining reserve levels will be crucial for Pakistan’s economic health and stability in the coming months.
