Islamabad: Pakistan's trade deficit has increased by 42 per cent year-on-year to a record high of $30 billion in the first 11 months of the current fiscal year due to falling exports and a sharp increase in the import bill.
The country's annual trade deficit was $20.435 billion when the ruling Pakistan Muslim League-Nawaz party came to power in 2013. The trade deficit has been on the rise ever since, Dawn reported.
Trade deficit stood at $3.465 billion in May, a rise of nearly 61 per cent compared to the same month a year ago, according to the data released by the Pakistan Bureau of Statistics on Monday.
Two reasons explain the trade deficit: rising import bill of capital goods, petroleum products and food products; and a steep fall in exports despite Prime Minister Nawaz Sharif's support package to boost exports.
The trade deficit is said to be posing a serious threat to external balance of payment, the daily reported.
In July-May, the overall import bill rose 20.6 per cent year-on-year to $48.54 billion. In May alone, it increased 28 per cent to $5.09 billion.
In the year 2012-13, the import bill was at $44 billion. It is expected to reach over $53 billion this fiscal year.
Exports fell 11 per cent year-on-year to $1.627 billion in May after witnessing paltry growths in the previous two months.
Export proceeds grew 5 per cent in April and 3 per cent in March.
Exports are in decline despite government claims of providing the industry with round-the-clock power supply since November 2014.
Similarly, the government was also providing Rs 3 per unit concession in electricity tariff since 2016 to export-oriented industries.
In the 11 months through May, the export proceeds fell to $18.54 billion from $19.14 billion a year ago.
Under a three-year Strategic Trade Policy unveiled last year, the government set an annual export target of $35 billion by 2018.
To boost exports, Shaif announced a subsidy package of 180 billion Pakistani rupees for textile, clothing, sports, surgical, leather and carpet sectors.
The government removed Commerce Secretary Azmat Ali Ranjha for failing to promptly implement the trade policy.
He was replaced by Younis Dagha, who was shunted out from the Ministry of Water and Power for his alleged failure to manage power load-shedding issues.
Under the Strategic Trade Policy 2015-18, the Ministry of Commerce notified five cash support schemes to improve product design, encourage innovation, facilitate branding and certification, upgrade technology for new machinery and plants, provide cash support for plant and machinery for agro-processing and give duty drawbacks on local taxes.