LAHORE: Pakistan’s imports hit near three-year high of $5.66 billion in March with major contribution coming from import of wheat and sugar, oil and gas, fertilisers and pesticides, automobiles, mobile phones and machinery and equipment for industries.
The increase in imports suggests that Pakistan’s economic activities are on a rise amid the third wave of the Covid-19 pandemic.
However, persistent growth in imports – which grew over 71% to $5.66 billion in March compared to $3.3 billion in the same month last year – may widen the country’s current account deficit, which means that Pakistan’s capacity to make international payments for imports and foreign debt repayment would become weaker.
“The latest trade numbers do not suggest that the economy is heating up,” said Arif Habib Limited Head of Research Tahir Abbas while talking to newsmen.
“The good thing is that exports also surged in March along with imports” he said.
Exports increased 31% to $2.36 billion in March compared to $1.81 billion in the same month last year, Pakistan Bureau of Statistics (PBS) reported.
The problem is that growth in exports is nominal compared to imports in percentage terms, while total volume of exports in dollar terms stands at less than half of imports.
In absolute terms, exports surged by almost one-fifth ($500 million) of the imports that clocked-in at $2.3 billion in March. Therefore, a notable growth in exports is a must to create a balance in trade.
“If the current trend of massive import growth and nominal export growth is maintained over the next three to four months, then the economy may show signs of heating up,” he said.
He said that strong inflow of workers’ remittances has helped the economy maintain its current account balance (the gap between foreign currencies inflows compared to outflows) in a surplus at $881 million during the first eight months (July-February) of current fiscal year 2021.