ISLAMABAD: The country’s exports shrank for the third month in a row on a monthly basis, slightly dropping by 0.63 per cent to $2.37 billion in November, official data showed on Thursday.
On a year-on-year basis, the exports dipped for the second consecutive month, as they fell 18.3pc from $2.9bn a year ago.
In contrast, imports rose 11.3pc to $5.25bn in November compared to October, meaning a monthly trade deficit of $2.88bn.
However, the imports were 33.6pc lower than the November 2021 figure of $7.89bn, meaning the annual trade gap was 42.5pc down in November.
Imports rise in November after dropping for two months; July-Nov trade gap comes in at $14.4bn
In the first five months (July to November) of the ongoing fiscal year, exports were down 3.5pc at $11.93bn compared to $12.36bn in the corresponding period last year. The drop shows the government would find it difficult to achieve the export target this fiscal year.
Imports during the same period were $26.34bn, a decrease of 20pc from a year ago. The trade deficit during July-November also shrank 30pc to $14.406bn.
Exporters believe that one of the main reasons behind falling exports was the exchange rate instability. The discontinuation of duty drawbacks on local taxes and levies by the government has also created liquidity issues for the export sector.
No official statement was issued from the commerce ministry to explain the reasons for the decline in export proceeds. Commerce Minister Naveed Qamar since taking responsibility for the ministry has constantly been on foreign tours.
In the previous fiscal year (2021-22), Pakistan not only achieved its export target but also exceeded the psychological barrier of $30bn, as proceeds rose 26.6pc to $31.85bn from $25.16bn a year earlier.
However, the import bill also jumped 43pc to cross $80bn in 2021-22, up from $56.12bn a year ago.
The non-payment of sales tax refunds was another contributory factor to the falling exports from the country. There are multiple reasons for the decline in exports. Globally retailers are carrying huge inventories as retail sales have suffered due to high inflation.
According to the finance ministry’s monthly outlook for November, sluggish foreign demand and domestic supply issues, following the floods-induced destruction of exportable crops, are responsible for the weak export performance. However, in the coming months, it is expected that exports will improve on account of targeted policies announced recently by the government to stimulate exports.
But these dynamics may be hindered if the economic conditions in the main export markets remained volatile and uncertain, it noted.
Published in Dawn, December 2nd, 2022
