In a promising development for Pakistan’s economy, the State Bank of Pakistan (SBP) has reported a significant increase in the export of goods and services to China during the first two months of the current fiscal year (2023-24). This increase, amounting to 5.16 percent, reflects a growing trade relationship between the two nations. Additionally, the data reveals a decline in imports from China, which may have far-reaching implications for Pakistan’s trade balance.
Export Growth to China:
According to data released by the SBP, Pakistan’s exports to China during July and August of the fiscal year 2023-24 reached a total of US $350.297 million, compared to US $333.077 million during the same period in the previous fiscal year. This represents a noteworthy growth rate of 5.16 percent.
On a year-to-year basis, the increase is even more substantial, with exports to China surging by 25.09 percent. In August 2022, exports were recorded at $159.021 million, whereas in August 2023, they reached $198.932 million.
Moreover, on a month-on-month basis, there was a significant rise of 31.42 percent in exports to China during August 2023, compared to July 2023, reaching $198.932 million.
Impact on Overall Exports:
While exports to China have shown robust growth, Pakistan’s overall exports to other countries experienced a decrease of 8.26 percent in the first two months of the fiscal year 2023-24. This decline, from US $4.951 billion to US $4.541 billion, may prompt a reevaluation of Pakistan’s trade strategies.
Imports from China:
In contrast to the positive export figures, imports from China into Pakistan saw a decline during the months under review. Imports were recorded at US $1,861.702 million in July-August (2023-24), as compared to US $2,377.070 million in the same period of the previous fiscal year, marking a notable decrease of 21.68 percent.
Similarly, on a year-on-year basis, imports from China declined by 28.17 percent, dropping from US $1,251.219 million in August 2022 to US $898.722 million in August 2023.
Even on a month-on-month basis, imports from China witnessed a 6.67 percent decrease during August 2023 compared to July 2023, further indicating shifting trade dynamics.
Overall Trade Balance:
The overall impact of these trade developments is significant, as Pakistan’s imports from all sources decreased by 26.01 percent, from US $11.474 billion to US $8.489 billion. This may lead to a more favorable trade balance, provided that export growth continues and imports remain controlled.
Conclusion:
The recent trends in Pakistan’s trade with China are encouraging, with exports on the rise and imports in decline. This underscores the growing importance of the trade relationship between the two countries and the potential for Pakistan to strengthen its economic ties with China. However, it is crucial for Pakistan to continue diversifying its export base and explore opportunities for trade with other nations to ensure long-term economic stability. These developments demonstrate the evolving dynamics of international trade and the need for adaptability in a rapidly changing global economy.
