Annual Analytical Report on External Trade Statistics of Pakistan 2 0 2 4 F Y 73 SECTION-3 2024 sharp contraction may indicate a slowdown in industrial expansion or infrastructure projects, with businesses and government entities reducing spending on long-term capital investments amid economic uncertainties. 3.2.4. Overall Trends and Implications The overall 0.8 percent decrease in total imports during FY 2024 reflects a cautious economic environment. While intermediate goods imports remained steady, the declines in consumer and capital goods suggest possible adjustments in both public and private sector spending, along with shifts in domestic consumption patterns. Despite these reductions, Pakistan’s reliance on imported goods, especially for industrial production, remains substantial. Table 69: Pakistan’s Imports by Product Category Economic Category VALUE (MILLION US$) % SHARE % CHANGE FY 2024 FY 2023 TOTAL IMPORTS 54,779 55,198
-0.8 INTERMEDIATE GOODS 33,420 33,457 61 -0.1 CONSUMER GOODS 17,715 17,935 32.3 -1.2 CAPITAL GOODS 3,644 3,806 6.7 -4.3 Other Business Services 1,550 1,627 -4.7 Government Goods & Services 1,174 1,112 5.6 Other Services 238 362 -34.3
74
Annual Analytical Report on External Trade Statistics of Pakistan
2 0 2 4
F Y
Table 70: Imports by economic category FY 2024
END USER/ INDUSTRY
Consumer
Goods
Consumer/
Intermediate
Goods
Consumer/
Capital Goods
Intermediate
Goods
Intermedi
ate/ Consumer
Goods
Intermediate/
Capital Goods
Capital
Goods
Capital/ Con
suemr Goods
Capital/ Inter
mediate Goods
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
1.Agriculture, forestry,
fishing, food, beverages,
tobacco
2,232
2,164
94
122
0
0
6,910
7,412
49
51
0
0
196
353
0
0
0
0
2.Mining, quarrying, refinery,
fuels, chemicals, electricity,
water, waste treatment
1
1
11,483
12,455
0
0
12,215
12,230
0
0
0
0
503
667
0
0
0
0
3.Construction, wood, glass,
stone, basic metals, hous
ing, electrical appliances,
furniture
389
391
3
3
8
6
2,737
2,754
468
397
0
0
1045
863
0
0
18
15
4.Textile, apparel, shoes
13
13
112
113
0 2,310 3,400 441 374
0 149 295 5 5 2 2 5.Transport equipment and services, travel, postal services 1103 867 1 0 15 48 3,820 3,501 33 20 8 7 573 580 0 0 0 0 6.ICT, media, computers, business and financial services 2024 1531 0 1 20 19 2,802 1,456 0 0 27 23 348 270 364 268 4 3 7.Health, pharmaceuticals, education, cultural, sport 208 194 4 3 4 3 1,212 1,343 360 461 0 0 404 457 0 0 0 0 8.Government, military and other 0 0 1 1 0 0 26 27 2 1 0 0 17 17 0 0 0 0 9. Miscellaneous 0 0 0 0 0 0 0 0 0 0 0 0 16 11 0 0 0 0 TOTAL 5,970 5,161 11,698 12,698 47 76 32,032 32,123 1,353 1,304 35 30 3,251 3,513 369 273 24 20
Annual Analytical Report on External Trade Statistics of Pakistan 2 0 2 4 F Y 75 SECTION-3 2024
Annual Analytical Report on External Trade Statistics of Pakistan 2 0 2 4 F Y 77 SECTION-5 2024 SECTION-4 2024 4. TRADE DEFICIT – COMPOSITION Pakistan’s trade deficit has been a persistent challenge for the economy, driven by high import bills and limited export growth. In FY 2024, the country faced numerous economic constraints, including foreign exchange shortages, inflation, and global economic uncertainty, all of which contributed to the trade imbalance. Table 71: Trade during FY 2024 INDICATORS VALUE (MILLION US$) % CHANGE FY 2024 FY 2023 TOTAL EXPORT 30.675 27.724 10.6 TOTAL IMPORT 54.779 55.198 -0.8 TRADE BALANCE -24.104 -27.474 -12.3 In FY 2024, Pakistan’s trade deficit stood at US$ 24.104 billion, representing a improvement of 12.3 percent compared to the previous year, FY 2023, when the deficit was US$ 27.474 billion. While the government attempted to curb non-essential imports and stimulate export growth, the trade deficit remained significant due to rising energy costs, reliance on imported raw materials, and slow export diversification. 4.1. MAJOR CONTRIBUTING FACTORS TO THE TRADE DEFICIT United States, the European Union (EU), and China were among Pakistan’s top export destinations. 1. High Energy Imports Pakistan’s reliance on energy imports, particularly petroleum products, natural gas, and coal, was a major driver of the trade deficit. The country’s energy needs continued to grow due to population growth, industrial demand, and power generation requirements. 2. Limited Export Diversification Pakistan’s export sector struggled to achieve the diversification needed to compete globally. The country’s exports remained concentrated in traditional categories like textiles and agricultural products, while high-value- added sectors, such as technology and manufacturing, contributed little to export growth. 3. Key Import and Export Partners Pakistan’s trade deficit was also shaped by its trade relationships with key partners. China, the UAE, and Saudi Arabia remained the largest import sources, while the United States, the European Union (EU), and China were among Pakistan’s top export destinations. 4.2. Government Policies and Measures to Address the Trade Deficit The government of Pakistan implemented several measures during FY 2024 to reduce the trade deficit, focusing on curbing non-essential imports, promoting exports, and stabilizing foreign exchange reserves. 1. Import Restrictions To limit the import bill, the government-imposed restrictions on non-essential items such as luxury goods, automobiles, and certain electronics. This policy had a modest impact on reducing imports but also faced criticism for affecting consumer choices and the local market. 2. Export Promotion The government introduced incentives for exporters, including tax breaks, subsidies for certain industries, and efforts to explore new markets. The textile and agriculture sectors were the primary beneficiaries of these policies, but the overall export growth was slower than expected due to global economic challenges. 4.3. Impact of Global Economic Condi tions Pakistan’s trade deficit in FY 2024 was also influenced by external factors such as global commodity prices, exchange rate fluctuations, and geopolitical uncertainties. Rising oil prices put upward pressure on energy imports, while a weaker Pakistani rupee increased the cost of imports, further widening the trade gap. In FY 2024, Pakistan’s trade deficit remained substantial, driven by high energy imports and limited export growth. Although the government took steps to reduce the trade gap, global economic conditions and domestic constraints hindered significant progress. Going forward, Pakistan must focus on long-term solutions such as increasing domestic production capabilities, diversifying exports, and negotiating trade agreements to ensure sustainable economic growth and reduce the trade deficit.
Annual Analytical Report on External Trade Statistics of Pakistan 2 0 2 4 F Y 79 SECTION-5 2024
Annual Analytical Report on External Trade Statistics of Pakistan 2 0 2 4 F Y 81 SECTION-5 2024 5. TRADE INDICES Pakistan Bureau of Statistics currently compiling following indicators on quarterly basis: 1. Unit value index of exports 2. Unit value index of imports 3. Quantum index of exports 4. Quantum index of imports 5. Terms of trade 5.1. Unit Value Index of Exports and Imports In FY 2024, Pakistan’s trade performance was influenced not only by the volume of exports and imports but also by the prices associated with these trade flows. The Unit Value Index (UVI) is a vital indicator used to measure the average price level of goods that are exported or imported. It provides insights into how much of the change in the value of trade is due to price fluctuations rather than changes in quantity. Table 72: Unit value indices of External Trade INDICES TYPE Q1 (Jul-Sep) Q2 (Oct-Dec) Q3 (Jan-Mar) Q4 (Apr-Jun) Yearly FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 Export UVI 315.1 251.6 358.1 246.8 346.9 277.8 337.4 299.4 339.4 268.9 Percentage change 25.2 45.1 24.9 12.7 26.2 Import UVI 249.7 256.6 278.9 234.6 272.6 229.9 288.8 230.8 272.5 238 Percentage change -2.7 18.9 18.6 25.1 14.5 Terms of trade 126.2 98 128.4 105.2 127.2 120.8 116.8 129.7 124.5 113 Percentage change in terms of trade index 28.7 22 5.3 -10 10.2 5.1.1. Pakistan’s Export Unit Value Index (FY 2024) In FY 2024, the Export Unit Value Index showed a significant increase of 26.3 percent and reached at 339.37 as compared to 268.69 in FY 2023, reflecting rising global prices for key export commodities such as textiles, rice, and surgical instruments. However, demand-side pressures, competition, and logistical costs also influenced prices. 5.1.2. Pakistan’s Import Unit Value Index (FY 2024) The Import Unit Value Index showed a moderate increase 14.5 percent and stood at 272.50 in FY 2024, from 237.99 during FY 2023 due to rising global inflation, especially for petroleum products, machinery, and food imports like edible oils. The depreciation of the Pakistani rupee also exacerbated the rise in import prices. Unit Value Indices for exports and imports in FY 2024 reflect the broader challenges the country faced due to global price hikes and local economic conditions. The rising import UVI, particularly for energy and food, has placed significant strain on the economy, increasing the trade deficit. On the export side, Pakistan faced moderate price gains, but these were offset by rising production costs and weak global demand. 5.2. Terms of Trade Country’s terms of trade trend in all four quarters of FY2024 is positive as the import price index is lower than the export price index except 4th quarter. The highest positive percentage change in term of trade over all is observed 28.7 percent in 1st quarter during FY23.
82 Annual Analytical Report on External Trade Statistics of Pakistan 2 0 2 4 F Y 5.3. Pakistan’s Quantum Index of Ex ports and Imports During FY 2024 Pakistan’s trade sector showed a notable upswing during FY 2024, with both the Quantum Index of Exports (QIE) and the Quantum Index of Imports (QII) exhibiting significant growth. These indices, which reflect the physical volume of goods traded without factoring in price changes, provide a clearer picture of the real movement of goods in and out of the country. The increase in both export and import volumes highlights Pakistan’s active participation in global trade, despite Table 73: Quantum indices of External Trade economic challenges like inflation, currency depreciation, and global supply chain disruptions. 5.3.1. Pakistan’s Quantum Index of Exports (QIE) During FY 2024 Pakistan’s Quantum Index of Exports experienced 18.0 percent increase during FY 2024, reflecting a strong recovery in export volumes despite global economic uncertainties. Key sectors such as textiles, rice, and surgical instruments led this growth, benefiting from increased global demand and Pakistan’s improved export competitiveness due to currency depreciation. INDICES TYPE Q1 (Jul-Sep) Q2 (Oct-Dec) Q3 (Jan-Mar) Q4 (Apr-Jun) Yearly FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 Export QI 146.1 115.6 151.2 128.3 147.2 129.5 148.4 129 148.2 125.6 Percentage change 26.4 17.9 13.7 15 18 Import QI 134.2 101.9 124.2 98.9 115.1 93.8 142.8 118.3 129.1 103.2 Percentage change 31.6 25.6 22.7 20.6 25 5.3.2. Pakistan’s Quantum Index of Imports (QII) During FY 2024 The Quantum Index of Imports showed an even more significant rise, increasing by 25.0 percent during FY 2024. This surge was largely due to higher demand for energy imports (particularly petroleum products), machinery, and essential food items like wheat and edible oils. 5.3.3. Factors Driving the Surge in Trade Volumes Several factors contributed to the increase in both export and import volumes during FY 2024. a. Currency Depreciation The Pakistani rupee depreciated significantly during FY 2024, making exports cheaper and more competitive in international markets. This helped boost the volume of exports, particularly in price-sensitive sectors like textiles and agriculture. However, the weaker currency also made imports more expensive, but due to Pakistan’s reliance on essential imports like petroleum and food, import volumes still surged despite the higher cost. b. Rising Global and Domestic Demand Global demand for key Pakistani exports, such as rice, textiles, and surgical instruments, remained robust. Domestically, the country’s growing energy needs and food shortages led to a sharp rise in import volumes. Industrial expansion and infrastructure development also pushed up demand for imported machinery and equipment. c. Energy and Food Security Concerns Energy shortages and domestic agricultural shortfalls in wheat and edible oils forced Pakistan to increase its reliance on imports. The surge in petroleum imports reflects the country’s ongoing struggle to meet energy needs, while rising global food prices necessitated higher volumes of imported foodstuffs. 5.3.4. Economic Implications of the Surge in Trade Volumes The rise in both export and import volumes had mixed implications for Pakistan’s economy during FY 2024. On the one hand, the growth in export volumes was a positive sign, reflecting resilience in key sectors and helping to