The economists recorded that Pakistan’s terms of trade, which gauge the ratio of export to import prices, have not only been adverse, but have also deteriorated over the years, which has unfavorably impacted the economy in terms of growth and balance of payments. If an economy’s terms of trade are less than 100 percent, they are regarded as adverse. They have also mentioned that in the case of developing states, which depend on non-oil primary products for export earnings, the terms of trade tend to deteriorate over time. According to the Pakistan Bureau of Statistics (PBS), in the last one decade from FY2008 to 2017 – full-year statistics for FY2018 is not yet available; the country registered the overall yearly average terms of trade of 55.82 percent. However, in the preceding decade (FY1998-2007), the average terms of trade were 88.26 percent.
The statistics explains that a sharp deterioration in the terms of trade over the years. In FY2017, Pakistan’s terms of trade reached at 57.17 percent, which suggests that the country’s average export prices are almost half the import prices. On a disaggregate level, it is only in the primary sectors like food and fuels, that Pakistan’s terms of trade have been mostly greater than 100 percent each.
However, the present Government of Pakistan is trying to increase the trade between the other countries. According to the sources, presently the Government of Pakistan and Chinese government have agreed to do trade in their own currencies instead of dollar. Furthermore, these governments agreed to do business in Pakistani rupee and Chinese currency Yuan.
The economists have mentioned that Pakistan and UAE have agreed to transform their bilateral relations into Long Term Strategic Economic Partnership. On the other hand bilateral trade between Pakistan and Russia is expected to enhance through direct banking channels. It is also recorded that Uzbekistan was the biggest trading partner of Pakistan in Central Asia as the bilateral trade between the two countries stood $ 95 million in the last 9-month and with the present trend, it was expected to reach $ 300 million in few years.
Pakistan Bureau of Statistics (PBS) also calculated that imports (provisional) into Pakistan during October-2018 worth to Rs.631,246 million as compared to Rs. 549,708 million in September-2018 and Rs.515,086 million during October-2017 explaining a rise of 14.83 percent over September-2018 and of 22.55 percent over October-2017. Statistics showed that main commodities of imports during October-2018 were petroleum products (Rs.82,552 million), petroleum crude (Rs.62,870 million), iron & steel (Rs.33,217 million), Natural Gas Liquefied (Rs.33,189 million), plastic materials (Rs.24,045 million), electrical machinery & apparatus (Rs.19,242 million), palm oil (Rs.17,850 million), iron & steel scrap (Rs.13,692 million), medicinal products (Rs.11,723 million) and fertilizer manufactured (Rs.11,233 million). In terms of US dollars the imports during October-2018 was $4,841 million as against to $4,430 million in September-2018 explaining a rise of 9.28 percent but declined by 1.00 percent as against to $ 4,890 million in October-2017. The PBS officials also calculated that the imports during July-October, 2018 totaled Rs.2,392,907 million as compared to Rs.2,007,915 million during the same period of last year explaining a rise of 19.17 percent. In terms of US dollars the imports during July-October, 2018 totaled $19,040 million as compared to $19,060 million during the same period of previous year explaining a decline of 0.10 percent.
According PBS, exports (provisional) from Pakistan during October-2018 worth to Rs.248,128 million as compared to Rs.214,367 million during September-2018 and Rs.198,177 million during October-2017 explaining a rise of 15.75 percent over September-2018 and of 25.21 percent over October-2017. The officials also recorded that main commodities of exports during October-2018 were knitwear (Rs.34,101 million), readymade garments (Rs.27,496 million), bedwear (Rs.24,431 million), cotton cloth (Rs.24,018 million), rice and others (Rs.11,839 million), cotton yarn (Rs.10,306 million), towels (Rs.8,533 million), madeup articles (excl. towels & bedwear) (Rs.8,298 million), fish & fish preparations (Rs.5,539 million) and rice basmati (Rs.4,939 million). Furthermore, in terms of US dollars the exports in October-2018 was $1,903 million as against to $1,728 million in September-2018 explaining a rise of 10.15 percent and by 1.17 percent as against to $1,881 million in October-2017. They have also recorded that exports during July-October, 2018 totaled Rs.915,387 million as compared to Rs.741,306 million during the same period of previous year explaining a rise of 23.48 percent. In terms of US dollars the exports during July-October, 2018 totaled $7,282 million as compared to $7,037 million during the same period of previous year explaining a rise of 3.48 percent.