Balance of Payments of Pakistan

Basically the balance of payment is the difference between the value of exports of
a country and the value of imports of a countryAnother reason for this negative balance of
payment is the fact that Pakistani goods do not have a very high demand in the market because
of the lack of standardization in their products as well as the absence of quality control. Another
source that increases the imports is the mindset of the public, which prefers imported goods to
local goods. Lastly, it is the constant increase in oil prices that has led to the huge deficit in the
balance of payment in Pakistan.
Basically the main reason of a deficit balance of payment is because, goods that are being
produced in pakistan has a lot of competition in the world market and pakistani goods are
unable to compete with the excellent qualities of the international products, Since Pakistan itself
is not producing high quality products so therefore even people of pakistan prefer to have
imported goods rather than goods produced in Pakistan and therefore there is a lot of import but
mainly imported goods contain oil related goods to fulfill pakistan's needs which is imported in
large quantities which is unethical for the balance of payment of Pakistan, Pakistan's main
exports are dependent on the agricultural goods which are also easily available in the
neighbouring countries like bangladesh and India and indonesia etc, so even here Pakistan
faces competition, Tourism in pakistan has also been declining due to the unpopularity and
increasing of illegal activities even though Pakistan has tourist attraction but foreigners fear to
come to Pakistan due to the negative stories they have heard and they deny to come to
Pakistan so therefore Pakistan even suffers due to less tourists who bring foreign currency of
theirs into a country

Current Account:
2016 2017 2018
- 7425 Million US$ -12621 Million US$ -18130 Million US$
. For Pakistan, the current balance of payment represents a negative figure, which elucidates
the fact that the value of Pakistan's imports is much greater than the value of Pakistan's exports.
A very strong reason for this negative figure is the need for strengthening the industrial sector of
Pakistan for which the import of capital goods is required, which forms a large part of
Pakistan's exports.
1-merchandise and services

2016 2017 2018

-22385 Million US$ -26680 Million US$ -31074 Million US$
reason for this negative balance of payment is the fact that Pakistani goods do not have a very
high demand in the market because of the lack of standardization in their products as well as
the absence of quality control
2- Factor income

2016 2017 2018

-5048 Million US$ -5048 Million US$ -5082 Million US$