ISLAMABAD: Pakistan’s exports of merchandise grew 16 per cent year-on-year in February 2018, indicating a revival in the overseas sales of Pakistani goods.

Upward trend in exports proceeds was recorded since June 2017, which will contribute towards bridging the deficit in current account that has come under pressure because of the rising import bill.

In rupee terms, export proceeds posted a growth of 22pc, indicating an impact of rupee depreciations on export proceeds from the country.

In absolute terms, exports edged up to $1.9 billion in February from $1.6bn a year ago, data released by the Commerce Division showed on Friday.

In the first eight months of the current fiscal year, export proceeds recorded an annual growth of 11.98pc to $14.86bn.

An official statement of the commerce ministry said that the current year’s export performance has already contributed additional foreign exchange inflows of around $1.5bn during the first eight months and is expected to reach the figure of additional $2.5bn during 2017-18.

This increase in economic activity in external sector refl­e­cts an increase of 0.8pc of GDP. This means around additional Rs280bn of incomes to trade, industry, agricultural sectors and the resultant additional employment.

The statement further add that these results have been achieved due to the export-friendly policies and incentives of the government and the renewed efforts towards seeking better market access by the Commerce Division. The positive trend in the international demand and exchange rate correction are also expected to help sustain this rising trend in the coming months.

But data show that despite this growth in export proceeds, the trade deficit surged by 21pc to reach $24.44bn in the first eight months from $20.16bn over the corresponding period of last year.

The rising trade deficit is due to the increase in import bill during the period under review.

The import bill reached $39.3bn in July-February FY18 from $33.43bn over the last year, reflecting an increase of 17.55pc.

On monthly basis, import bill was up 8.43pc to $4.8bn in February, from $4.4bn over the corresponding month of last year.

The Commerce Division in a statement claimed the imports have also responded to the steps taken to check the surge in consumer goods inflows since the past few years. The imposition of regulatory duties on 355 non-essential consumer items by Economic Coordination Committee on the proposal by commerce ministry resulted in the reduction of their imports by 16pc, while the Federal Bureau of Revenue’s turnover registered an increase.

However, since the large chunk of imports comprise of essential goods such as fuels and edible oil, which has been affected by the rising trend since July 2017, the impact of the reduced imports of non-essential goods is being offset.

The imports of machinery and raw materials, essential for economic growth also contribute to the gap in the balance of trade. However, despite all these pressures, the increase in imports has been only 9.7pc during February 2018 as compared to th same month in 2017.

Published in Dawn, March 10th, 2018