- Exports slide by 3.9% in July-Feb 2016-17, imports up 15.99%
KARACHI: Despite the government’s packages of Rs 180 billion announced by the prime minister for textile industry in January 2017, the exports of the country decreased by 3.90 per cent to $13.318 billion in July-February 2016-17, while imports touched all-time high at $33.520 billion or 15.99 per cent during the same period.
According to the data released by Pakistan Bureau of Statistics (PBS) here on Saturday, the country’s export stood at $13.318 billion in last eight months of the current fiscal year compared to $13.859 billion down by $541 million, while imports of the country touched $33.520 billion compared to $28.898 billion in the same period last year.
Trade deficit further enhanced up to $20.202 billion in July-Feb 2016-17 up 34.33 per cent compared to $15.039 billion in the same period last year. It surged by 87.88 per cent in February 2017 on MOM basis, while 4.67 per cent up on YOY basis.
“The ministry of commerce through central bank has imposed 100 per cent margin financing condition on the imports of CBU cars and its parts while other few luxurious products from March this year which will help reducing import bill,” an analyst said.
The imports of textile machinery will have to benefit the industry, but we are looking at nothing for the last eight months, an analyst said. Owing to the rising oil import bills, total imports had jumped to $33.520 billion around 160 per cent up of the total exports of the country, is not a good sign for country’s economy, he added.
This time the federal government has taken right decision to improve cotton import which was main demand of All Pakistan Textile Mills Association (APTMA), he said. “The owners of the textile industry had already passed on all benefits given by the government to the buyers,” he added.
On Year-on-Year basis, the goods exports are stood at $1.638 billion in February 2017 down by 7.98 per cent compared to $1.780 billion in January 2017, meanwhile on Month on Month basis, the goods exports went down by 8.29 per cent compared to the exports of $1.786 billion in January 2017, the data said.
Similarly, the imports of the country declined by 5.91 per cent to $4.445 billion in February 2017 compared to $4.724 billion in January 2017, while on MOM basis, the imports increased by 35.52 per cent compared to $3.280 billion in February 2016.
The analyst said all economic indicators of the country have been improved in last eight months except the exports and Foreign Direct Investment (FDI) while we are looking at 2017 ‘the best year of the country’.
An analyst at Topline brokerage house said, “Pakistan’s Balance of Payments (BoP) will remain manageable even though concerns on an external account are valid.” Pakistan has comfortably managed Current Account Deficit (CAD) of 2 per cent of GDP.
CAD along with the additional burden of CPEC related debt/equity repayments will not alarmingly exceed over 2 per cent of GDP during the life of CPEC projects, he added.
Only during FY20-FY25, CAD along with additional CPEC repayment will average 2.4 per cent of GDP, which will need to be financed by higher FDI, exports etc, he added.
Estimating the CPEC related repayments (principal and interest on foreign currency debt and repayment of profits/ dividend on equity investment) is relatively easy. However, benefits from this mega investment of US$50bn at a time when Pakistan’s investment to Gross Domestic Product (GDP) ratio has fallen close to the multi-year low of 15pc is difficult to ascertain.
This mega CPEC investment will definitely generate economic activity that will increase exports, curtail import growth and increase Foreign Direct Investment (FDI), we believe.
In the last budget 2016-17, the federal government has also set its $35 billion export target by the end of 2018.
In year 2015-16, the country’s goods export declined by 12.11 per cent to $20.802 billion from $23.667 billion in 2014-15 while total imports fell by 2.32 per cent to $44.765 billion from $45.826 billion.