Pakistan’s trade deficit reduced by US$ 6 billion in last year

ISLAMABAD, Pakistan: The National Assembly was told that Pakistan’s exports and imports remained US$ 22,979 million and US$ 54,799 million respectively in the financial year 2018-19 whereas these were recorded as US$ 23,212 million and US$ 60,795 million respectively in the corresponding year.

The Minister for Commerce and Textile told the House in reply to a question by Pakistan Tehreek-e-Insaf’s (PTI) MNA Munawara Bibi Baloch that though Pakistan’s trade deficit was reduced by nearly US$ 6 billion in the 2018-19.

However overall Pakistan’s exports have decreased from US$ 24.6 billion in 2012-13 to US$ 22.979 in 2018-19.

Pakistan’s balance of trade

The minister told that predominantly, the reasons of the decline in Pakistan’s exports are structural weaknesses, lack of product and market diversification.

Structural weaknesses include:

  1. High cost of doing business;
  2. High tariffs on the imported raw materials;

iii. Lack of market diversification;

  1. Lack of product diversification; and
  2. Low Productivity

Pakistan lacks product and market diversification as a result of which it accesses low-end markets and fetches low prices for its products:

  1. The traditional export products comprises more than 70% share of the total exports.
  2. Pakistan’s export destinations are mainly five export countries or regions inclusive of USA, China, Afghanistan, United Kingdom and European Union.

iii. Pakistan is fetching lower prices, however, the reason for the lower prices are:

  • Lack of value addition
  • Low diversification
  • Uncompetitive production methods
  • Inadequate of branding and certifications