ISLAMABAD: Pakistan’s trade data for the months of November and December 2023 presents a mixed picture of economic resilience amid global uncertainties.
The exports witnessed a notable upswing in December, reaching $2.822 billion compared to $2.573 billion in November. This represents a robust month-on-month growth of 9.68%.
The positive trajectory in exports can be attributed to various factors, including a boost in international demand for key Pakistani goods, effective trade policies, and the country’s efforts to diversify its export portfolio.
Dr. Khurram Mughal, the State Bank’s ex-senior economist, told media that the surge in exports was a positive sign, indicating that Pakistan was finding new markets and expanding its presence in the existing ones.
While imports also increased, the pace was more moderate. December imports stood at $4.650 billion, compared to $4.539 billion in November, resulting in a 2.45% month-on-month increase.
Khurram said, “The moderate increase in imports suggests that Pakistan’s economy is maintaining a balance between meeting the domestic demands and controlling the influx of foreign goods. The government’s efforts to manage trade deficit seem to be contributing to this controlled growth in imports.”
A key highlight in the data is the lower trade deficit. In December, it shrank to -$1.828 billion, a 7.02% drop from the -$1.966 billion in November. This shows progress for Pakistan’s economic stability, since a smaller trade deficit usually means a better balance of exports and imports, according to media.
“The reduction in trade deficit is a welcome development for economy, reflecting improved trade dynamics and a potential strengthening of the country’s external position. However, policymakers need to sustain these efforts to ensure a more robust and sustainable trade balance in the long term,” Khurram said.
In a comprehensive overview of Pakistan’s annual trade data for the year ending December 2023, the country showcases a mixed but promising economic landscape. Notably, the export sector witnessed a substantial 22.64% year-on-year growth, with December 2023 exports reaching $2.822 billion compared to $2.301 billion in the same month of the previous year.
Conversely, the import side of the equation tells a different story, with a year-on-year contraction of 9.60%. December 2023 imports amounted to $4.650 billion, down from $5.144 billion in December 2022.
The sharp 35.70% reduction in trade deficit, from -$2.843 billion in December 2022 to -$1.828 billion in December 2023, is undoubtedly a positive sign, indicating a more balanced trade position for Pakistan. However, sustaining this delicate equilibrium will require a nuanced approach to trade policies and continued efforts to enhance both the quality and diversity of exports. –INP
