ISLAMABAD: Pakistan’s exports of goods declined 3.96 per cent year-on-year in December 2019 despite cash support and multiple currency depreciation.
Exports clocked in at $1.99 billion in December, down 3.96pc over $2.07bn in corresponding month last year.
For the six-month period between July and December, exports edged up by 3.17pc to $11.53bn, as against $11.18bn in same half last year. The numbers are not commensurate with the level of cash support, concessions in utilities and multiple currency depreciations.
The overall slowdown in the global markets has been pointed as one of the reasons behind lacklustre increase in Pakistan’s exports.
The government projects exports during 2019-20 to reach $26.187bn, up from $24.656bn the fiscal year before.
In Budget 2019-20, it reduced the cost of raw materials and semi-finished products used in exportable goods by exempting them from all customs duties. The government also provided sales tax refund to export sectors during the ongoing fiscal year.
Data show that imports in the first half of 2019-20 came in at $23.16bn, dipping by 17.13pc over $27.95bn in same period last year.
Meanwhile, value of imported goods in December declined 10.33pc to $3.95bn as against $4.40bn over the corresponding month last year.
As a result, trade deficit plunged by 30.67pc year-on-year during the first half, primarily on the back of double-digit fall in imports along with a nominal increase in export proceeds.
Moreover, the government’s corrective measures to slow down imports in order to reduce pressures on foreign exchange reserves resulted in an overall demand slump.
In absolute terms, the negative trade gap narrowed to $11.62bn in July-December, from $16.77n in same period last year. The same figure for December fell by 15.99pc to $1.96bn, from $2.33bn in corresponding month last year.
The Ministry of Commerce estimates the annual trade deficit may decrease by $12bn to $19bn in the ongoing fiscal year, as compared to $31bn in 2018-19.
Services export rise
Meanwhile, export of services grew by marginal 2.95 per cent to $2.165 billion in the first five months of current fiscal year against same period last year, data published by the Pakistan Bureau of Statistics showed on Tuesday.
On the other hand, data for the month of November, 2019 showed services exports jumped by 5.73pc to $416.83 million compared to $394.26m in November, 2018.
The services sector has emerged as the leading driver of economic growth as its share in the GDP increased from 56pc in 2005-06 to nearly 59pc in 2017-18.
Its major sub-sectors include finance and insurance, transport and storage, wholesale and retail trade, public administration and defence.
Pakistan has opened up its market to foreign services providers, particularly in banking, insurance, telecommunications and retail sectors.
Moreover, imports of services during the period under review reached to $3.784bn from $3.836bn over the corresponding period last year.
On monthly basis, the imports of services posted a negative growth of 12.38pc in November 2019 clocking in at $666.77m.
The import of services reached to $9.66bn in July-June 2019, down 14.9pc from $11.35bn over the corresponding months last year.
The trade deficit in services has declined by 6.59pc to $1.618bn in July-Nov 2019 as against $1.733bn over the corresponding months of last year.
The trade deficit in services dipped 31.84pc to $249.94m in November 2019 on a year-on-year basis.
Published in Dawn, January 8th, 2020