What led to an increase in Pakistan’s exports by 45.35% amid the COVID-19 pandemic?
Multiple factors led to the significant development.
Pakistan’s exports have shown an increase of 45.35% in May 2020 as compared to the month of April. The reason for this increase is the low labor costs in Pakistan, which led to increased orders from the international market.
In the month of April, Pakistan’s exports went down by 47.24%, which caused many businesses to suspend their operations because of the low demand.
Exports increase after lockdown eased:
Due to the COVID-19 pandemic, production, manufacturing, and global stock markets slowed down. However, after the lockdown was eased to restore economic activity, exports have seen a significant increase.
The export value has gone up from $957 million in the month of April to $1.39 billion in May. The Managing Director at Khadim Ali Shah Bukhari Securities A.A.H Soomro said that resuming exports is a leading indicator of easing the lockdown globally. He added that the decrease in the prices of oil and decreasing imports have also played a significant role.
He expects stability to control the disorderly movements in the currency beyond Rs.165. However, compared to the previous month, the imports also decreased in the month of May by 11.02%. The trade deficit during May declined to $1.46 billion from $2.24 billion previously.
Textiles make up a significant part of Pakistan’s exports. The owner of a textile trading business Waqar Hanif said that textile units are experiencing a decrease in exports by 30% to 50% generally. But, they will get an exact idea in the month of June about how things are progressing as economies have started to open up in phases.
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