Administrative measures and lower energy imports (due to a fall in demand) together have resulted in imports falling down by 12 percent to $5.4 billion. Four months ago, the imports were approaching $8 billion. That was due to the high quantum of petroleum imports at peak prices. Later the energy prices revised up massively and SBP controlled the engineering goods and machinery imports. That has yielded results. The unintended consequence could be upcoming job losses and rising non-performing loans as private companies default on their bank borrowings.

Food imports are down by 8 percent to $940 million. Palm oil imports remained high – at $419 million – the monthly number used to be around $300 on average last year. The prices have come down, but the quantity of imports is growing. Market intelligence tells that it's being re-exported to Afghanistan. Since Afghani Central Bank’s dollar account is frozen (post the US troops exit), traders are buying dollars from the open market to pay. Essentially, Pakistan’s external account is bearing the burden of Afghani imports. Similar is the story of a few other food items.

The bigger decline is in machinery imports. It fell by 29 percent to $473 million. That is half of what it was last year. That is by design. SBP allows 50 percent of last year’s quota in imports of machinery. The bigger decline is in smartphones, down to one-third from last year’s average. This will improve a bit and would be at half next month. These machinery imports are predictable. Mobile phones would be at $85 million a month till SBP keeps this 50 percent quota.

The story of the transport sector is similar. Automobile imports are pretty much restricted to half. Last month, they were down by 50 percent from last year’s monthly average. Again, by design. The number is $187 million now. The number will remain the same until SBP shows some generosity

All eyes should be on petroleum imports. The decline in this can help to open other imports. There is some relief in it. It's down by 16 percent from the previous month to $1.6 billion. The number is 20 percent lower than last year’s average. There is the benefit of both lower international prices and lower volumes. Higher local prices have done the trick. In the Jul-Sep quarter, there is a significant decline in quantities. The country is not importing extra RLNG in winter on the spot and the power demand will be lower due to seasonal impact. The energy imports are likely to taper a bit from this level.

There is a demand dent visible in all the other sectors. The demand is likely to fall further. And imports shall remain below $6 billion till the time administrative control on engineering goods is intact.