ISLAMABAD: The Ministry of Finance has come up with a detailed report explaining that macro adjustment policies adopted in the outgoing fiscal year resulting in stronger growth in multiple sectors.

The policies listed for monetary tightening, exchange rate adjustments and cuts in development spending have started paying the desired results with stability and growing strength visible in many sectors of the economy.

An official statement issued on Friday said that the current account deficit (CAD) declined significantly by 32.1 per cent to $13.508 billion (4.8pc of GDP) during FY19 as compared $19.897bn (6.3pc of GDP), which widened by 57.6pc in last year.

During first two months (July-August) of 2019-20, the CAD reduced by 54.7pc to $1.292bn as compared $2.85bn during same period last year.

Regarding decline in exports, the statement said strong negative price effect dominates the positive quantity effect, hence exports declined by 1pc during the FY19. During July-August FY20, exports increased by 2.79pc to $3.753bn compared to $3.651bn in last year.

According to merchandise trade on disaggregated level, textile exports increased by 2.3pc in value in the two-month period over the last year.

This sector constitutes 60pc of total exports. Value-added exports of textile items like knitwear, which comprises 14.4pc of total exports increased both in quantity and value by10.7pc and 12.8pc during the period under review, respectively.

Ready-made garments constituting share of 12.5pc in exports increased both in quantity and value by 34.6pc and 7.5pc in July-August, respectively. Value-added exports increased due to growing demand and improvement in export competitiveness after exchange rate adjustment. Bedwear exports increased both in quantity and in value by 20.4pc and 1.2pc, respectively.

Pakistan’s imports during FY19 stood at $54.799bn compared with $60.795bn in FY18. The impact of stabilisation efforts brings a decline of 9.86pc in imports in FY19. During July-August FY20, imports decreased by 21.41pc to $7.677bn against $9.769bn in the same period last year.

The government imposed up to 60pc regulatory duties on 570 luxury and non-essential imported goods to curtail the rising imports.

The analysis of merchandise import data suggests that the import of machinery group having share of 22.4pc in total imports, increased by 8.2pc.

This signifies an impressive picture ahead in terms of dwindling situation of LSM. Textile machinery, Telecom machinery and electrical machinery imports increased by 17.3pc, 11.1pc and 20.3 pc, respectively. Other machinery imports increased by 20.1pc.

Food group, constitutes 9.1pc of total imports, registered a decline of 26.8pc during July-August FY20. Minor and major crops of domestic agriculture have been improved during the current fiscal year which has lessened the dependency on imported food.

Among the food group, the tea imports decreased in both quantity and value by 26.8pc and 35.4pc, respectively. The palm oil decreased in both quantity and value by 14.1pc and 29.8pc, respectively.

On the back of initiatives taken by the government, workers’ remittances surpass the target of $21.2bn in FY19 which increased by 9.7pc to $21.846bn during FY19. Although remittances during first two months of FY20 declined. However, ongoing scenario of overseas employment will be helpful in achieving remittances target this year.

According to overseas employment statistics, 373,000 people have been sent abroad during the first eight months of 2019. Whereas total 380,000 were registered as overseas employed in the whole year 2018.

This will positively impact foreign exchange inflows in terms of remittances, added the statement.

Published in Dawn, September 28th, 2019