Exports dip in March amid global slowdown

Updated April 04, 2020

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After a one-off growth of 13.76pc in February, exports have resumed their declining trend, which has been accelerated due to the coronavirus-led slowdown.
After a one-off growth of 13.76pc in February, exports have resumed their declining trend, which has been accelerated due to the coronavirus-led slowdown.

ISLAMABAD: The country’s export of goods declined by 8.46 per cent year-on-year to $1.807 billion in March, from $1.974bn amid closure of retail outlets in the wake of the coronavirus outbreak, the Pakistan Bureau of Statistics reported on Friday.

However, the export proceeds edged up 2.23pc to $17.451bn during the first nine months of 2019-20, as against $17.071bn over the corresponding period last year.

The government projects exports during the ongoing fiscal year to reach $26.187bn, from $24.656bn in FY19.

In the 2019-20 budget, it reduced the cost of raw materials and semi-finished products used in exportable goods by exempting them from all customs duties.

Meanwhile, the imports continued their downward trend, providing some breathing space to the country despite paltry growth in exports.

The data showed that imports clocked in at $34.814bn during 9MFY20, down 14.42pc, from $40.679bn in the same period last year. The decline in value of imported goods in March was 19.85pc to $3.299bn against $4.116bn during the same month last year.

As a result, the trade deficit came down by 26.45pc in the first nine months of 2019-20 mainly on the back of a double-digit fall in imports.

In absolute terms, the trade gap narrowed to $17.363bn during 9MFY20, from $23.608bn over the corresponding months last year. In March, the deficit plunged 30.35pc to $1.492bn, from $2.142bn in the same period of FY19.

The Ministry of Commerce estimates that the annual trade deficit may decrease by $12bn to reach $19bn in the ongoing fiscal year, from $31bn in 2018-19.

The clothing and textile exporters associations have estimated that close to $1.3 billion worth of orders from foreign buyers for March and April have either been postponed or cancelled.

To resolve the liquidity issues of the industry, especially textile, the government has released billions of rupees in relief during March.

Commerce Adviser Abdul Razak Dawood said the government has released Rs47bn to the textile sector in 100 days under various schemes while the total sum released during the 20-month period of PTI, Rs93bn have despatched.

He said in the nine years of the past two governments, only an amount of Rs67bn was released to the textiles and the refunds of non-textile sectors will be announced in the coming days.

Under the prime minister’s Rs1,240bn stimulus package announced on March 27, the government has released Rs100bn to industry under tax refunds on Apr 2.

Meanwhile, the finance adviser in a statement claimed the tax refunds released to the industry are the highest in Pakistan’s history. Improved cash flow position of the companies will ensure that workers get their salaries on time, he hoped.

Until Mar 31, all tax refunds have now been cleared and the payments made on Apr 2 include Rs52bn in general sales tax refunds to Industry the industry (non-export sector), Rs10bn released to the export industry through the FASTER system and Rs15bn in duty drawback payments.

On top of these, the government also released Rs20.5bn under the DLTL scheme.

Published in Dawn, April 4th, 2020