PAKISTAN TRADE DEFICIT

By :
Ammara Haque 13883
M. Asif
Jawad M. Hassan

TRADE DEFICIT:
An Economic measure of a Negative Balance of
Trade in which a Country's Imports Exceeds its
Exports. A trade deficit represents an outflow of
Domestic Currency to Foreign Markets.
In simple words:
A trade deficit is caused when a country cannot
produce all it needs.
EXPORTS

IMPORTS

POSITIVE AND NEGATIVE

ASPECTS OF TRADE DEFICIT:

A trade deficit is not a bad thing. It raises the standard of living of a

country's residents, since they now have access to a wider variety of goods
and services for a more competitive price.
Also It can reduce the threat of inflation, since the products are priced
lower. A trade deficit can also indicate that the country's residents are
feeling confident, and wealthy, enough to buy more than the country
produces.
However, a trade deficit can cause jobs outsourcing. That's because, as a
country imports certain goods rather than buying domestically, the local
companies start to go out of business.
The domestic business itself will lose the expertise needed to produce that
good competitively. As a result, fewer jobs in that industry are created in
the home country. Instead, the foreign companies hire new workers to keep
up with the demand for their exports.

PAKISTANS TRADE DEFICIT:

Pakistan recorded a Trade Deficit of (1, 00,609) PKR Million in January

of 2015. Balance of Trade in Pakistan averaged (23,011.73) PKR Million
from 1957 until 2015, reaching an all-time
High of 6, 457 PKR Million in June of 2003
Record low of (2, 80,964) PKR Million in August of 2014.

PAKISTANS BALANCE OF TRADE:

Pakistans
Trade

Last

Previous

Highest

Lowest

Unit

Balance of T (1,00,609.0)
rade

(1,71,767.0)

6,457.0

(2,80,964.0)

PKR Million

Exports

2,07,806.0

2,17,338.0

2,75,483.0

51.0

PKR Million

Imports

3,08,415.0

3,89,105.0

4,72,228.0

96.0

PKR Million

Overview of Pakistans Trade

Number:
Pakistan Trade

Last

Previous

Highest

Lowest

Unit

Balance of Trade

(1,00,609.0)

(1,71,767.0)

6,457.0

(2,80,964.0)

PKR Million

Exports

2,07,806.0

2,17,338.0

2,75,483.0

51.0

PKR Million

Imports

3,08,415.0

3,89,105.0

4,72,228.0

96.0

PKR Million

External Debt

64,338.0

64,385.0

66,490.0

33,172.0

USD Million

Remittances

4,287.0

4,695.00

4,695.0

906.0

USD Million

Gold Reserves

64.4

64.4

65.4

64.5

Tonnes

Oil 92.3

95.1

95.1

49.7

BBL/D/1K

3,184.30

2,099.10

USD Million

Crude
Production

Foreign
Direct 2,816.40
Investment

2,665.30

Reason for Pakistans Trade Deficit:

Manufacturing industry(not mature)

Child labor(sports goods,carpet,leather,fan)
Political issues(ransom,union,strikes)
Trade surplus countries(china and Korea)
Policy for sme`s (Small medium Enterprises)
Housing schemes and agriculture lands
Taxes and heavy tariffs(on imports )
Ministry for protection of rights
Energy crisis- Faisalabad crisis
Availability of cheap products 11.Loans on political
basis(entrepreneur)

IMPORTS OF PAKISTAN:
IMPORTS:
Petroleum products
Machinery and Parts
Plastics
Tea, Coffee and Edible Oil
Transportation Equipment
Paperand Paperboard
Iron andsteel related products

Imports in Pakistan decreased to

3, 08,415 PKR Million in January of 2015
from
3, 89,105 PKR Million in December of
2014.

PAKISTANS IMPORTS:

Actual

Previous

Highest

Lowest

3,08,415.00 3,89,105.00 4,72,228.00 96.00

Dates

Unit

1957 - 2015 PKR

Million

Frequency
Monthly

IMPORTS AND THEIR

SOURCES:

Main imports are Mineral fuels (16 percent of the total imports)
Manufactured goods (16 percent).
Miscellaneous articles (12 percent),
Beverage and tobacco (12 percent),
Animal and vegetal oils and fats (10 percent),
Crude materials except fuel (9 percent), chemicals (9 percent),
Machinery (8 percent)
Food and live animals (7 percent).

Countries to IMPORT:
Main import partners are China (19.7 percent of the total imports), United
Arab Emirates (12.1 percent), Saudi Arabia (12 percent), United States (3.2
percent) and Kuwait (6.3 percent).

PAKISTANS EXPORTS:

Exports in Pakistan decreased to

2, 07,806 PKR Million in January of 2015 from
2, 17,338 PKR Million in December of 2014.
Exports in Pakistan averaged 33,895.02 PKR Million from 1957 until
2015, reaching an all-time
High of 2, 75,483 PKR Million in September of 2013
Record low of 51 PKR Million in April of 1958.

PAKISTANS EXPORTS:

Actual

Previous

Highest

Lowest

2,07,806.00 2,17,338.00 2,75,483.00 51.00

Dates

Unit

1957 - 2015 PKR

Million

Frequency
Monthly

PAKISTANS MAIN EXPORTS:

Mineral fuels (19 percent of the total shipments):

Manufactured Goods (19 percent): Sports and Surgical tools Sialkot ,Knife
and cutlery Wazirabad,Washing Machines, machinery spare parts and Motors
Gujranwala(Super Asia, Climax, Golden) ,Fans Gujrat and Gujranwala,
Carpets and Rugs - Lahore, Peshawar and Karachi and Leather Goods.
Beverage and tobacco (13 percent): Fruit Juices (Shezan, Frooto, Maza,
Bambino and Country juices are major exporters)
Food and live animals (11 percent): Rice, Wheat, Seafood, Sugar Cane
Chemicals (11 percent): Tanning chemicals, Dying chemicals, Denim
chemicals, Washing chemicals
Machinery (8 percent): Fridge ,Refrigerator etc (Pak electron, Dawlance,
Super Asia etc)
Miscellaneous articles (8 percent):
COUNTRIES TO EXPORT: Main export partners are United States (13.6
percent), China (11 percent of the total export), United Arab Emirates (8.5
percent) and Saudi Arabia (8.5 percent).
(March 2, 2015)

PAKISTANS GDP:

The Gross Domestic Product (GDP) in Pakistan expanded 4.14 percent in

2013/14 fiscal year. GDP Growth Rate in Pakistan Averaged 4.92 percent
from 1952 until 2014, reaching an all-time
High of 10.22 percent in 1954
Record low of (1.80) percent in 1952.
GDP Growth Rate in Pakistan is reported by the Pakistan Bureau of
Statistics.
GDP IN BILLION $:
The Gross Domestic Product (GDP) in Pakistan was worth 236.62 billion
US dollars in 2013. The GDP value of Pakistan represents 0.38 percent of
the world economy. GDP in Pakistan averaged 56.23 US$ Billion from
1960 until 2013, reaching an all-time
High of 236.62 USD Billion in 2013
Record low of 3.71 USD Billion in 1960.

PAKISTANS GDP:

Pakistan GDP Last

GDP
GDP Growth Rate

Previous
236.62
4.14

224.88
3.7

Highest
236.62
10.22

Lowest

Unit

3.71 USD Billion

-1.8 Percent

PAKISTANS GDP GROWTH

RATE:

Actual

Previous

Highest

Lowest

Dates

Unit

4.14

3.70

10.22

-1.80

1952
2014

- percent

Frequenc
y
Yearly

COUNTRIES SIMILAR IN
GDP:
Countries

GDP

Reference

Previous

Highest

Lowest

Unit

Pakistan

236.62

13-Dec

224.88

236.62

3.71

USD Billion

Finland

256.84

13-Dec

247.14

271.97

5.22

USD Billion

Chile

277.2

13-Dec

266.26

277.2

4.2

USD Billion

Egypt

271.97

13-Dec

262.83

271.97

USD Billion

Greece

241.72

13-Dec

248.42

341.6

4.4

USD Billion

Iraq

222.88

13-Dec

215.84

222.88

1.7

USD Billion

Kazakhstan

224.41

13-Dec

203.52

224.41

16.9

USD Billion

Recommendations:

Focus on Regional Trade

Create Regulatory Efficiencies
Promote Agro-processed exports
Increase Exports from less developed Regions of Pakistan
Promote exports of Services Sector
Enhance access to export financing and credit guarantees
Revamp Export Promotion Agencies
Mobilize new investment in export oriented industries
Facilitate Exporting industry overcome energy crisis
Enhance Product and Market Development and Diversification
Undertake effective Trade Diplomacy
Increasing Green Exports
Rationalize the Tariff Protection Policy
Enhance Role of Women in Exports
Reform and Develop Domestic Commerce

Few points which really need the

attention of the government:
Focus on regional Trade:
Establishment of Pakistan Land Port Authority (PLPA) to Strengthen
Regional Trade
Setting Up of EXIM Bank
Promotion of Services Sector Exports
Mark-up support on prevailing LTFF for future import/purchase of
machinery
Mark-up Rate support on Export Finance Scheme (EFS) to selected
export sectors
Marketing Development Assistance for Regional countries

Conclusion:

Pakistan needs to revisit its regional and global trade policies.

It must fully embrace trade with India and Central Asia by opening up
more routes and acceding to the TIR Convention.
Pakistans ports could provide Central Asia with the shortest land route to
sea and there is tremendous export potential among the Central Asian
markets.
With regard to global trade, Pakistan must restructure its taxation policies
and look for ways to integrate its comparative advantages within global
supply chains.
It must also reassess its current protectionist policies, which are stifling the
economy and undermining the countrys ability to compete in the global
market.
Instead, Pakistan must allow domestic industries and infrastructure to
operate in an environment that maximizes its potential.

References:
http://www.tradingeconomics.com
http://www.investopedia.com
Pakistan Bureau of Statistics