The improvement in the
trade balance was made possible as imports
April 22 - 28, 2002
The provisional foreign trade figures for the first
9 months July 2001 to March 2002) of the current financial have
revealed that, though both the export and imports during this period
were lower as against the same period last year, the trade balance has
improved by about 38 per cent.
Pakistan faces a trade gap of $818,484 million
during the first nine months of the current fiscal as compared to
$1.319,527 billion of the corresponding period last year.
According to sources in the Ministry of Commerce
the exports fetched $6.536,426 billion against $6.720,906 billion last
year, showing a decline of 2.75 per cent, or $184 million. Till
February, the exports were three per cent less against the same period
last year. Exports in the remaining months are expected to improve due
to the reconstruction activities in Afghanistan and utilization of
European Union's quota.
Imports declined by 8.53 percent to $7.354,900
billion as compared to $8.040,433 billion last year. According to the
figures, the imports till February declined by 10.09 per cent, which
shows that the situation has improved.
The newly released statistics proved that the
imports during the nine months have reduced by $685 million, against
$726 million, indicating an improvement in this sector.
Sources also said the exports attracted $724
million in March as compared to $654.8 million in February, showing an
increase of 10.57 per cent, whereas the imports increased by 20.13 per
cent to $886,6 million in March against $738 million in February. In
March the exports declined by 1.15 per cent as compared to the same
period of last year, however, the imports improved by 4.46 per cent to
$886.6 million from $848.7 million in March last.
The sources further said that the Commerce Ministry
was expecting $8.5 billion in terms of export earnings if the country
goes ahead with this pace, however, the full participation of
Pakistan's industrial and productive sector in the reconstruction of
Afghanistan and utilization of the EU quota could improve the
The Commerce Minister however estimates that
exports earnings will be nearly $9 billion by end of June. Talking to
newsmen informally at a function in Islamabad last week he claimed
that export value of added textiles was gradually increasing and he
expected a jump in exports earnings during April-June period. "As
a matter of fact, the country's value added textile exports has
already increased from 35 per cent of exports to 50 per cent. He said
that while the exports of yarn, gray cloth and knitted items declined
considerably, the export of garment, bed linen, towel, are up.
"This is good sign and we have moved towards value-added exports
in the textile sector. We are expected to move further in this
direction", the minister observed. With the help of government
measures, Pakistan has become more competitive in various products
today compared to October 1999, he added.
The Minister disclosed that he had written a letter
to the US authorities, intimating that Pakistan was not satisfied with
the market access provided to its exporters and that it should be
expanded to a reasonable level. "We are waiting for their reply,
but we should also understand the harsh ground realities," he
said adding that the European Union has provided a duty-free market
access to Pakistan and to almost every item, but the exporters are not
able to capitalize this opportunity. The improvement in the trade
balance was made possible as imports declined more than exports during
the period under review. While exports were down by 2.67 per cent, the
reduction in imports was around 8.44 per cent as compared to the same
period of the last financial year. However, the long-lasting
improvement in the country's trade balance should come through
sustained increase in exports.
This year's original export target of $10 billion
is unlikely to be achieved. By the end of June, exports may be around
$8.5 billion but they should be growing more rapidly from next year.
The share of value-added textile exports is on the rise. There is also
strong possibility of new markets opening for the country's exports.
With the revival of the economy, the demand for
imports is bound to rise and it should be ready to finance their
rising volume. Foreign trade figures reveal the imports in March this
year were up by almost 18 per cent over February signifying that
economic activity had started picking up again. This is also reflected
in export figures which went up by over 11 per cent in the month of
March as compared to February 2002. The rebound in the export sector
should by fully exploited enabling the economy to gain full advantage
Ideally, the trade balance should be zero with
exports financing the total imports in any single year. This goal has
been proposed and pursued a number of times in the recent past but has
somehow remained elusive. During the period under review, exports
financed as much as around 89 per cent of imports. The immediate task
is to increase the exports up to a level where they can finance the
entire annual import requirement. This task might look difficult but
it is certainly not beyond reach. With economy back on the path of
recovery, the objective of wiping out the trade deficit should be more