Data doesn't add up: IMF demands explanation from Pakistan on $11 billion trade gap

The International Monetary Fund (IMF) has asked Pakistan to publicly disclose and reconcile $11 billion worth of discrepancies in its trade data, after finding major inconsistencies between figures reported by different government bodies over the past two fiscal years, The Express Tribune reported on Sunday.

According to the paper, the IMF's query has raised questions over the credibility of Pakistan's external sector indicators and the accuracy of data used to calculate the country's current account surplus.

Government sources cited by the report said imports reported by Pakistan Revenue Automation Limited (PRAL) were $5.1 billion lower than those reported by the Pakistan Single Window (PSW) for fiscal year 2023–24, and the gap widened to $5.7 billion in the following fiscal year. The PSW's import data, considered more comprehensive, also exceeded the State Bank of Pakistan's (SBP) freight-on-board-based import statistics - the data used to calculate the country's external balance.

The IMF reportedly approached the Pakistan Bureau of Statistics (PBS) before the start of its review talks and later held discussions with the Ministry of Planning and Development. During the meetings, the IMF recommended that Pakistan adopt a clear communication policy to explain discrepancies in trade figures and changes in methodology, to prevent "mistrust between the government and data users."

According to the report, Pakistani officials admitted that the trade data submitted to the Geneva-based International Trade Center (ITC) was not comprehensive, acknowledging that some import figures were missing. They suggested that the underreporting was the result of a transition from PRAL to PSW as the main trade data source.

PRAL operates under the Federal Board of Revenue (FBR), while PSW is an independent legal entity staffed largely by customs officers. The PSW data reportedly covers all import entries - including those related to trade facilitation schemes - whereas PRAL's dataset excluded several categories, particularly those concerning raw materials.

The discrepancies came to light when authorities began investigating a mismatch between trade data reported by Pakistani importers and Chinese exporters.

Prime Minister Shehbaz Sharif formed a committee to investigate the gaps. The review of five years of data revealed that the PBS had been using an outdated query system to retrieve trade data from PRAL, leading to years of underreporting.

PSW's database, which processes 15 types of goods declarations, was found to be far more complete than PRAL’s, which covered only seven types, the report said. The result was underreporting of $5.1 billion in FY2023–24 and $5.7 billion in FY2022–23, largely due to missing entries under trade facilitation schemes.

The most significant gaps were in the textile sector, where imports worth nearly $3 billion were missing from official statistics. Imports in the metal group were also understated by about $1 billion in FY2023–24. Despite the IMF's call for transparency, officials were hesitant to make corrections public, fearing that revised data could affect net export calculations and economic growth estimates.