ISLAMABAD: The country’s exports registered a 3.17 per cent decline in January this year as compared to the corresponding month of last year.
This is the second consecutive month that the country has witnessed a fall in its exports; it had dropped by 3.8pc in December 2019.
According to the data released by the Pakistan Bureau of Statistics (PBS), exports for January 2020 stood at $1.973 billion as compared to $2.03 billion registered in January 2019, a decline of $61 million.
On a month-on-month basis, there was a decline of 1.15pc ($23 million), as the exports in December 2019 were recorded at $1.99 billion as compared to $1.97 billion in January this year.
During the first seven months of FY20, the growth of exports’ proceeds lowered to 2.14pc, from $13.49 billion in 7MFY19 to $13.21 billion in 7MFY20.
According to sources, the above-mentioned numbers were discouraging for the country as exports, which should have grown over the last few months owing to regular depreciation in the currency, have failed to pick up.
The government has projected exports during the ongoing fiscal year to reach $26.187 billion, up from $24.656 billion in FY19.
In the annual budget for FY20, the government had reduced the cost of raw materials and semi-finished products used in exportable products by exempting them from all customs’ duties.
The government had also promised to provide sales tax refunds to export-oriented sectors.
On the external side, Pakistan’s imports were still dropping, providing some breathing space to the country’s trade deficit, which dropped by 28.4pc in the first seven months of the current fiscal year.
In absolute terms, the trade gap narrowed to $13.75 billion in July-January 2019-20 from $19.2bn during the corresponding months of last year.
On a month-on-month basis, the deficit fell by 15.03pc to $2.06 billion in January this year from $2.43 billion in the corresponding month of last year.
The Ministry of Commerce (MoC) estimates that the annual trade deficit may decrease by $12 billion to $19 billion in the ongoing fiscal year from $31 billion in the last fiscal year.
According to PBS, the imports during the first seven months of FY20 clocked in at $27.24 billion, down 15.95pc from $32.42bn over the corresponding period of last year.
The decline in value of imported goods in January was 9.63pc to $4.03 billion as against $4.46 billion over the corresponding month of last year.
But the trend shows that the quantum of decline in imports is reducing with each passing month. This shows that the imports will stagnate around $4 billion per month in the next few months.
Though the MoC had issued the data last month even before finalizing it by the PBS, there was no word from the ministry’s officials.
Advisor to Prime Minister on Commerce Abdul Razak Dawood has also not yet explained the reasons for a decline in the exports proceeds from the country.
The Commerce Division’s main focus was on negotiating and seeking preferential market access but the same has not been linked with the domestic production line.
The large scale manufacturing sector is already in negative growth since July 2019 but still the ministry’s focus is on international trade agreements and negotiations besides market access.