Pakistan had a trade deficit of PKR 237.4 billion in October 2016 due to higher imports than exports. Imports rose 3.5% to PKR 421 billion while exports increased only 2.1% to PKR 183.7 billion. The key causes of Pakistan's trade deficit include high imports of energy and decreased developmental expenditures. To reduce the deficit and develop exports, Pakistan needs to transition from competing based on price to producing innovative new products using more efficient processes.

1. What Is Trade Deficit?
The amount by which the cost of a country's imports
exceeds the value of its exports.

2. Causes
• Current account deficit: more money is leaving the
country than flowing into it.
• Domestic companies: when domestic company
manufactures a lot of its products in other countries.

3. Trade Deficit of Pakistan
• PKR 237.4 billion in October of
2016
• 226.9 billion a year ago.
• Exports rose 2.1 percent to PKR
183.7 billion
• while imports went up 3.5
percent to PKR 421 billion.

4. Cause
s
• High imports of energy.
• Increase in heavy debt servicing and decreased
developmental expenditures is a reason for trade deficit in
Pakistan.

5. How To Develop The ExportSector?
• Stage 1 ‘factor’-driven economies, where countries compete
primarily on the use of unskilled labor and natural resources and
companies compete on the basis of price as they buy and sell basic
products or commodities
• Stage 2 ‘efficiency’-driven economies, where growth is based on
the development of more efficient production processes and
increased product quality.
• Stage 3 ‘innovation’-driven economies, where companies compete
by producing and delivering new and different products and
services by using the most sophisticated processes.

6. Referenc
e
• http://atlas.media.mit.edu/en/
• http://www.cpec.gov.pk/
• http://herald.dawn.com/news/1153597
• http://www.cpecinfo.com/
• http://www.tradingeconomics.com/pakistan/imports
• http://www.slideshare.net/cococorina/import-export-ibf