KARACHI: Statistics released by the national data-collecting agency paint an unflattering picture of exports, which came down 9 per cent annually between 2013-14 and 2015-16.

In particular, textile exports that constitute about three-fifths of the total registered negative growth in July-March despite preferential market access to the European Union, largest foreign consumer of Pakistani goods.

But every cloud has a silver lining. Recent data from the Pakistan Bureau of Statistics (PBS) shows a trend that may well be the forerunner of a reversal in Pakistan’s export fortunes.

Imports of textile machinery jumped 21pc year-on-year to $401.1 million in July-March. Imports of electricity-generating machinery surged 76pc over the same period. Added megawatts of electricity to run the newly imported textile machinery is the herald of future export proceeds, according to Stefano Pontecorvo, Italy’s ambassador to Pakistan.

Speaking to Dawn on the sidelines of Igatex Pakistan 2017, an international exhibition of textile machinery and technology held in April, Mr Pontecorvo said more than 70 Italian textile companies came to Karachi for the trade fair. Italy had the largest presence in the exhibition in which 550 companies from 35 countries took part.

“The Italian government and businesses are waking up to the huge potential that Pakistan has,” he said, adding that Pakistan has become the sixth largest buyer of Italian textile machinery.

“In three years, I expect the Pakistan-Italy trade volume to go up to six times of what it is today. I am bullish on Pakistan,” the ambassador said.

Pakistan’s imports from Italy were $444 million in 2015, down 5.4pc from 2014, according to the latest International Trade Centre (ITC) statistics. Pakistan’s exports to the European nation declined 19.4pc to $618.2m over the same period.

Noting that trade flows take time to change, Mr Pontecorvo said Pakistan has a solid entrepreneurial base, strong industry and sound banking system to fuel the expected economic expansion.

Internal restraints like energy shortages and uncertainty in the international market are major reasons for the decline in Pakistan’s exports, the ambassador said. But lower exports from Pakistan have also resulted in higher domestic consumption, he added. “Industrial capacity is limited. So you end up exporting less if you consume more. No wonder Pakistan’s domestic market (for textiles) is growing bigger and bigger,” he said.

Foreign direct investment (FDI) from Italy amounted to $41.7m in July-March, which made it the sixth largest foreign investor in Pakistan. Its investments are concentrated in textiles, surgical instruments, pharmaceuticals and plastics.

He said the rise in FDI from Italy is partly because Italians of Pakistani origin are taking interest in the country. “It’s a sign of confidence.”

Published in Dawn, May 2nd, 2017