Pakistan’s trade deficit with six Gulf countries fell by 46 percent in July. The decline came mainly due to a sharp reduction in imports.
The trade gap with Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain, Qatar and Oman fell to $750.5 million in July.
The deficit stood at around $1.4 billion during the same month last year. The latest figures show a significant improvement in Pakistan’s trade balance with the Gulf region.
Imports from the six Gulf countries dropped by 38.1 percent year-on-year. They fell to $1.04 billion during July.
At the same time, Pakistan’s exports to these markets increased by 4.7 percent. Exports reached $290.3 million during the month.
The decline in imports played the biggest role in reducing the overall trade deficit. Pakistan has strong trade links with Gulf countries, particularly for energy supplies.
The country depends heavily on the Gulf region for crude oil, petroleum products and liquefied natural gas. This makes Pakistan’s import bill sensitive to developments affecting energy shipments.
The Strait of Hormuz is particularly important for Pakistan’s energy imports. Any disruption in the region can increase risks for petroleum and LNG supplies.
Pakistan did not import any high-speed diesel during July. This contributed to the overall decline in petroleum-related imports.
Domestic refineries have also increased their output. Higher local production can reduce the need for imported petroleum products and help lower the country’s import bill.
Qatar recorded one of the sharpest changes in trade with Pakistan during the month. Pakistan’s imports from Qatar fell by 78 percent year-on-year.
Imports from Qatar dropped to $61.5 million in July. Pakistan’s exports to Qatar also declined during the period.
Exports to Qatar fell by 16 percent to $7.42 million. The figures indicate a substantial reduction in bilateral trade activity between the two countries.
Oman, however, recorded a different trend. Pakistan’s imports from Oman increased by 58 percent during July.
Imports from Oman reached $161 million during the month. Pakistan’s exports to Oman, however, declined by 11.3 percent to $20.5 million.
Overall, Pakistan imported $1.28 billion worth of petroleum products in July. The figure includes crude oil, LNG and LPG.
The latest trade figures show how energy imports continue to influence Pakistan’s external trade position. Lower petroleum imports can reduce pressure on the country’s import bill.
However, the sustainability of the improvement will depend on global energy prices, domestic refinery output and future import requirements.
The rise in exports to the wider Gulf region also provided some support. Continued growth in exports could help Pakistan further narrow its trade deficit with major regional markets.
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