The country’s trade numbers depict 34.6 percent annual and 25.4 percent monthly increase in trade deficit to $1.8 billion in July 2015.

The Pakistan Bureau of Statistics has reported that imports have increased by 4 percent annually to $3.4 billion, attributing the rise to the 4.8% more food (especially tea and pulses) and 17.7% higher agriculture input (fertilizers and insecticide) imports.

On the other side, exports proceeds fell by 17% YoY (21% MoM) to USD1.6bn. The decline is mainly led by 12% YoY drop in textile exports to USD1.0bn and 20.5% lower food segment (lower rice exports). However, downturn in textile exports (both Value Added textile and Basic textile segments) is attributable to the stable rupee despite depreciating regional currencies.

On a cumulative basis (7MCY15), textile exports have dipped to USD7.6bn as compared to $8 billion. Major decline was witnessed in Basic textiles that dropped by 11% YoY whereas, Value Added textiles remained stagnant.

The past few months have been quite tough for Pakistan exports, especially textile, due to a host of reasons, including lower Chinese demand, Euro depreciation, stiff competition from India, sharp drop in textile goods prices.

Now, continued strength of rupee against US Dollar compared to depreciating regional currencies (Chinese Yuan, Vietnamese Dong, Bangladeshi Taka) poses another threat to the Pakistan exports, especially textiles.