July 18, 2006	Tuesday	Jumadi-ul-Sani 21, 1427

ISLAMABAD, July 17: The federal cabinet has decided that trade figures in future will include data on merchandise, defence and services exports and imports to be effective from the year 2006-07.

This was announced by Commerce Minister Humayun Akhtar Khan in the trade policy for 2006-07 here on Monday. He said that trade figures released by the Federal Bureau of Statistics (FBS) in future, will also include data on defence exports as well as export and import of services for the first time in Pakistan's history. Currently, the trade statistics released by the FBS only pertain to merchandise exports and imports.

The minister said that merchandise exports were around $16.5 billion as against the target of $17 billion. He, however, also mentioned the defence exports amounting to an additional $275 million and services exports in three sectors to the tune of $392 million.

The minister attributed the shortfall in exports to low capacity of the commercial and manufacturing sector to maintain the growth trajectory of exports as it faced considerable strain due to many unforeseen reasons.

He said that the last year earthquake and the widespread destruction of property and infrastructure seriously hampered export related activity in a variety of ways.

Mr Khan said another major negative factor in the past year was the increase in the international oil prices to the unprecedented levels of around $70 to 75 per barrel. As a result, in the first nine months of last year the petroleum group import bill increased by 64.5 per cent. This fact has had two unpleasant effects. Firstly, it resulted in a dramatic increase in import bill and, therefore, widened the trade gap.

Secondly, it led to the increase in the cost of production in particular and the cost of doing business in general thereby adversely impacting the competitiveness of exports. The import bill comprised of 35 per cent machinery, 26.1 per cent industrial raw materials, 64.3 per cent POL products, 36.3 per cent food group and 35.7 per cent of other products during the period under review.

The minister said exports for the fiscal year 2005-06 amounted to a total of $16.468 billion. This represented an increase of $2.1 billion or 14.44 per cent over last year's level of $14.391 billion. This increase was slightly more than the $2 billion growth achieved last year. The export analysis showed that textile constitutes 66 per cent of total exports, rice 8 per cent, leather 7 per cent, petroleum 11.5 per cent, chemicals 1 per cent and other products 42 per cent.

He said Pakistan's merchandise export increased at the rate of 14.44 per cent this year, which was substantially more than the world merchandise export growth rate of 13.l per cent in 2005. The export of services would be increased during the years ahead.

However, he admitted that the statistics relating to trade in services were not properly recorded. It was decided that the State Bank of Pakistan will immediately start the process of fully disaggregating the services trade figures from the balance of payments statistics, so that by the end of this fiscal year figures have more clarity.

It was clearly evident that in the 10-month period- July 2005 to April 2006--export of services in only 3 service sectors-—construction, computer and other business services-- were around $392 million, he added.