ISLAMABAD: Merchandise exports fell for the 11th month in a row in July, plunging by 8.6 per cent year-on-year to $2.05 billion, showed data released by the Pakistan Bureau of Statistics on Tuesday.

The export proceeds are declining because of internal and external factors stoking up fears about the closure of industrial units, especially textile and clothing.

On a month-on-month basis, the export proceeds declined 12.68pc in July.

In FY23, the merchandise exports dipped by 12.71pc to $27.54bn from $31.78bn in FY22, missing the $32bn target by a wide margin of $4.46bn.

The government has projected an export target of $30bn for the current fiscal year.

Throughout the entire FY23, there was a conspicuous absence of any statements or meetings within the commerce ministry to address the causes behind the decline in exports and propose solutions to assist exporters.

The commerce minister’s engagements primarily consisted of frequent foreign tours, while failing to make any public statements regarding the diminishing exports.

At the same time, imports also plunged by 26.44pc to $3.66bn in July from $4.98bn in the corresponding month last year. On a month-on-month basis, the imports declined by 13.15pc.

The imports fell 31pc to $55.29bn in FY23 from $80.13bn in FY22.

The government has projected an import target of $58.69bn for FY24 against $55.29bn in FY23, an increase of $3.4bn or 8.14pc.

The government has now relaxed the import restrictions and announced that the State Bank of Pakistan will not use any measures to slow down or restrict the opening of letters of credit (LCs) from July 1.

This was also one of the conditions before reaching a Staff-Level Agreement with the IMF for a nine-month $3bn Stand-By Arrangement.

The trade deficit decelerated 41.16pc to $1.60bn in July from $2.73bn over the corresponding month of last year.

The trade deficit decelerated by 43pc to $27.54bn in the previous fiscal year from $48.35bn in the preceding fiscal year.

The exports started posting negative growth in July 2022, barring August when a slight increase was recorded because of the backlog of the preceding month. Export contraction is a worrisome factor, which will create problems in balancing the country’s external account.

The drop in textile and clothing, which constitutes over 60pc of total exports, was one of the main factors for the decline in overall exports in FY23.

Published in Dawn, Aug 2nd, 2023