Why Trade Deficit Cause Budget Deficit In Pakistan?

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A trade balance implies that exports return enough cash to offset cash that leaves the country to purchase imports. If these are out of balance in favor of Pakistan's trading partners, then the Pakistan's government must step forward with funds to bring the trade in back in balance . . . So trade can continue and so money is present to support government functioning. To obtain those funds, Pakistan must borrow back from the trade surplus of its trading partners, causing a budget deficit, to the degree that its trade deficit persists  and accrues a further extension of credit in the form of interest. Balanceto provide liquidityto provide

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