Pakistan’s Exports Fail To Lift Up

Port of Karachi. (Wikipedia)

Pakistan’s exports remained practically flat at $7.5 billion in the first four months of the current fiscal year.

Contrary to the government’s claim, the trade deficit narrowed due to a dip in imports, not due to an increase in exports.

Port Qasim. (Wikipedia)

The official trade figures reported by the Ministry of Commerce on Tuesday showed business as usual, which was contradictory to the claim made by Prime Minister Imran Khan in his presser the same day.

“During July-October 2020, exports decreased slightly by 0.1% and stood at $7.54 billion as compared to $7.55 billion during the same duration of last year,” according to a Ministry of Commerce statement.

The statement was released after a briefing to the Adviser to the Prime Minister on Commerce, Abdul Razak Dawood ,on the latest export trend.

Meanwhile, Prime Minister Imran Khan made a contradictory statement: “I’m happy that Pakistan’s exports grew at the quickest pace in the subcontinent in the post-COVID situation.”

Official figures of the Ministry of Commerce revealed a reduction of $7 million in exports during the July-October period.

Port Qasim. (Port Qasim Authority)

Meanwhile, imports during the July-October period decreased by 2.3% or $359 million to $15 billion, giving relief to the government that failed to enhance exports.

As a result, the balance of trade registered a decline of 4.5% to $7.4 billion compared to $7.8 billion last year.

The contraction in imports also showed that Pakistan’s economy was not growing at a healthy rate, which maintained the apprehension expressed by the Ministry of Finance in its current monthly economic viewpoint.

The ministry stated that the comeback in coronavirus cases constituted a challenge to the economic viewpoint, and the economic turnaround could be slower than forecast.

Gwadar Port. (Getty Images)

Exports remain one of the domains where the Pakistan Tehreek-e-Insaf (PTI) government struggles to make improvements. A marginal boost in exports in absolute terms often gives the impression of a major increase in percentage due to a shallow export base.

Pakistan’s exports have long stayed around $2 billion a month, and the trend did not alter despite 39% currency devaluation by the government in the past two years. The government has so far missed the annual export target in its first two years.

For the current fiscal year, the authorities have set the export target at $27.7 billion, which will need only 6.2% growth, and it should not be a challenging task.

Nevertheless, exports in the first four months were equal to only 27% of the annual target.

Imports in the current fiscal year are forecasted to contract 4.8% to $42.4 billion.

Imports in the first four months were equal to about 36% of the annual target.

Port of Karachi.

On a yearly basis, the trade deficit in October 2020 compared to the same month a year ago and contracted 22.6% from $2.1 billion to $1.6 billion, due to a steep decline in imports.

In absolute terms, there was a cutback of $463 million in the trade deficit on an annual basis.

The commerce ministry briefed that during July-October 2020, the increase in exports was mostly in the value-added sectors.

Meanwhile, the decrease in exports during July-October 2020 was mainly in the non-value-added sectors.

The adviser was also informed that compared to the same period of last year, Pakistan’s top five growing markets during July-October 2020 were Afghanistan, Indonesia, Qatar, Denmark, and South Korea.

What are your views on this? Share with us in the comments below.

  • Basically, our capacity is that much, even if we received more orders there is no setup to produce , so exports remain around $2B monthly for last 15 years. Capacity needs to built , more factories more machinery and then you can increase exports.

  • Shukar karo Allah ka ke that exports have not decreased in this epidemy, otherwise the markets in Europe and elsewhere are closed and dead.

  • Featured Content⭐