THE LATEST TRADE FIGURE
It is our endeavour to minimise the trade deficit and achieve a zero gap stage
From SHAMIM AHMED RIZVI, Islamabad
Sep 18 - 24, 2000
Exports from Pakistan in Aug. 2000 showed an increase of over 23.5 per cent if compared to the corresponding month of the last year and by 18 per cent compared to the previous month of July 2000. Exports stood at 790 million in Aug against 639 million in Aug 1999 and 668 million in July 2000. July & August exports combined are just 67 million short of the target of 1525 millions set for the 2 months.
However imports in these 2 months touched the figure 1638 million dollars showing a trade gap of 180 million during this period.
Officials in the Ministry of Commerce felt satisfied over this rising trend. The government has set an export target of 10 billion in the trade policy 2000-2001. Considering the trend set in the first 2 months, official feel that the target will ultimately be achieved. Trade analysts, however, feel that Pakistan must ensure monthly export of about 833 million dollars to reach the export target of 10 billion.
Meanwhile, in a meeting with the officials of the Export Promotion Bureau Commerce Minister Abdul Razzak Dawood, while looking at 17.57 per cent increase in July-August exports optimistically, said that the export target of 10 billion for the year will easily be achieved. The Minister appreciating the exporters, said the export of 790 million dollars worth commodities during the month of August is unprecedented as this figure has never been hit in a month. This showed 23.63 per cent appreciation of exports as compared to the corresponding period last year. Exports worth 692 million dollars were made during August 1998-99 and 639 million in August last year.
Exports also registered an upward trend during July as well when exports worth 669 million dollars were made against 602 million dollar of July last year, showing an upward change of 11.13 per cent. July-August exports in 1997-98 was 1354 million in 1998-99 it was 1216 million dollars, in 1999-2000 it was 1241 million dollars and in July 2000-2001, it was 1459 million dollars, showing an increase of 17.57 per cent. The minister said some of the export sectors have performed well while some others failed to come up to the expectations. Such sectors will be looked into for sorting out their strengths and weaknesses so that they could also be put in top gear. He added that removal of bottlenecks and resolution of different problems being faced by under performed sectors, will boost the export earnings and help make the achievement of the export target much easier.
It is our endeavour to minimise the trade deficit and achieve a zero gap stage, but it will mainly depend on the international prices of petrol and petroleum products. Presently the prices are soaring. Even last year our trade gap was mainly because of soaring oil prices. We spent about 1.3 billion dollar more on our petroleum requirement because of upsurge in prices, the minister added.
On the revenue generation side the Central Board of Revenue (CBR) has collected Rs.44.7 billion in taxes during the first 2 months of the current financial year showing an increase of 13.5 per cent over the collection during the corresponding period last year. It, however, fall short of the target fixed at Rs.90 billion for the first 3 months (July/Sept) of the current financial year. This target can be met if CBR collects 45.3 billion during the ongoing month of September which appears impossible. At best we can describe this increase as a modest start if seen against an estimated 25% increase in revenue with government expecting to raise it to Rs.435 billion at the end of current financial year. Not only the officials of the CBR the finance minister himself is highly optimistic and feels that the target will be exceeded by a big margin. He told the economic coordination committee at a meeting held in Islamabad last week that he expected the revenues to go up by 36 per cent as against 25% as estimated in the budget.
Presiding over the meeting, Finance Minister Shoukat Aziz said that the government's entire economic strategy was based on getting the additional 36 pc revenues. The meeting was told that the government would easily obtain an additional Rs.100 billion in the current fiscal. He said that development programmes could neither be initiated nor completed in case the CBR failed to achieve its Rs.436 billion revenue target for the year.
This increase of over Rs.100 billion in revenue generation is the dire need of the country. Besides many other conditionalities the IMF mission, currently on a visit to Pakistan, is insisting to bring down the fiscal deficit from present about 6.8 to 4.6 per cent of the GDP. This can be made possible by increasing the revenue by about Rs.100 billion during the current fiscal.
The emerging pattern of revenue collection shows that it has noticeably improved in August over July — a trend which should continue in the current month also. CBR officials have anticipated an accelerated growth in revenue from the second quarter of the current financial year. By launching the drive to document the economy, tax survey, and by extending the scope of general sales tax to trade and services, the government thinks that it can meet its huge revenue target comfortably. This supposition will be tested in the coming months.