Qudsia Bano

Pakistan's export performance for January 2024 showcased resilience amidst global economic fluctuations, says a latest report released by the Pakistan Bureau of Statistics (SBP). Although there was a marginal month-over-month (MoM) decline of 1.13%, with exports totaling $2,790 million, the annual picture reveals a growth of 24.72% compared to January 2023, WealthPK reports. This positive trend suggests that the export sector is making notable strides, potentially driven by the increased demand for goods in the international market. On the flip side, the import sector witnessed a 1.87% MoM increase, reaching $4,737 million in January 2024. The trade balance, represented by the trade deficit, expanded by 6.51% MoM, reaching -$1,947 million, reflecting the challenges in balancing export and import dynamics.

However, when assessing the yearly trend, the broader economic context comes into focus. The yearly statistics for January 2024 indicate a 1.84% decline in imports, totaling $4,737 million, compared to the same period in 2023. Meanwhile, the trade deficit witnessed a significant contraction of 24.80% at -$1,947 million. While the decrease in imports might be attributed to various factors, including global economic conditions and domestic policies, substantial reduction in trade deficit signifies a positive shift in Pakistan's trade dynamics.

Talking to WealthPK, Yasmin Syed, Trade Economist at the Ministry of Commerce, said the trade dynamics observed in Pakistan over the recent months indicate a nuanced economic outlook. The marginal month-over-month decline in exports suggests potential short-term challenges, possibly influenced by global economic uncertainties or specific industry-related factors. "However, the noteworthy yearly growth in exports paints a more optimistic picture, indicating the resilience and competitiveness of the export sector. The policymakers should delve into the underlying causes of the month-to-month fluctuations to design targeted interventions, ensuring sustained growth of the export industry.

Additionally, efforts should be directed toward enhancing the trade diversification strategy to mitigate vulnerability to external shocks and foster long-term stability," she said. Muhammad Tariq, a policy expert at the Ministry of Commerce, said: "Reduction in trade deficit is particularly significant, reflecting improved trade balance. While this can be viewed as a positive outcome, policymakers must balance this achievement with measures to ensure the sustainability of the country's import-dependent industries. A strategic approach to trade management is essential, striking a balance between encouraging exports and supporting key sectors that rely on imports for sustained growth."

inpCredit: INP-WealthPk