PAKISTAN'S EXPORTS OUTLOOK

Research Dept.
June 18 - 24, 2007

CURRENT CIRCUMSTANCES

Pakistan's current Fiscal year 2006-07 continued to show strong growth. The country's GDP growth is likely to reach 6.8% to 7% during the current FY07, due to the remarkable performance of the agriculture and services sector. According to the latest Economic Survey of Pakistan 2006-07, the agriculture sector contributed 1.1% , industry 1.8% and services 4.1% as compare to the last FY06 it was recorded as 0.4%, 1.3% and 4.9% respectively. As a result, the size of the GDP is expected to move up to $150 billion while the per capita income may go up to $950. On the other side, other performances remained quite weak. The gap in exports is far behind the target of $18.6 billion fixed for FY07. On the other hand, imports were rising much faster and sure to cross the target of $28 billion fixed for 2006-07.

Pakistan's exports during July-May, 06-07 totalled $ 15.481 billion as against $ 14.951 billion during the corresponding period of last year showing an increase of 3.62%. On the other side, Pakistan's Imports during July-May, 06-07 recorded $27.743 billion as against $25.594 billion during the corresponding period of last year showing an increase of 8.40%. Pakistan's trade deficit increased to US$12.262 billion during July-May FY 06-07 as compared with $10.653 billion during the corresponding period in FY06 showing a gap of 15.1%.

EXPORT TENDENCY

Pakistan's exports during the last six fiscal years 01 to 06 grew at annual average rate of 11.72 percent. Whereas the annual average growth rate during 1990s (1990-91 to 1999-00) was 6.10 percent.

YEAR

AVG. GROWTH

1990-91 to 2005-06

8.211

2000-01 to 2005-06

11.72

1990-91 to 1999-00

6.10

Sources: Federal Bureau Of Statistics

The Export's growth was due to higher exports of the Textile & Garments Category group 6.00%, Development Categories 4.00% and under the category of all others is recorded 25% but exports under other Core Categories shows a decline of 10.00%. Within Textile & Garments Category, the exports of Yarn, Garments, Art Silk & Syn. Tex, Tents And Canvas and Others Textiles have registered a significant growth but exports of Raw Cotton, Made-up incl. Bed wear, and Fabrics showed a turn down. The Development Categories items group have registered impressive growth despite significant decline in other Core Categories.

EXPORT COMPOSITION JULY TO APRIL
Value in Million $

S.#

COMMODITIES

2006-07

2005-06

GROWTH%

A.

Textile & Garments Category

8,908

8,384

6

Raw Cotton

49

57

(14)

Yarn

1,241

1,156

7

Fabrics

1,678

1,787

(6)

Garments

2,749

2,480

11

Madeups incl. Bedwear

1,977

2,013

(2)

Towels

490

478

3

Tents And Canvas

63

29

116

Art Silk & Syn. Tex

403

165

145

Others Textiles

258

220

17

B.

Other Core Categories

2,906

3,228

(10)

Rice

939

964

(3)

Leather Products

732

932

(21)

Sports Goods

223

271

(18)

Wool Raw / Carpets

191

215

(11)

Surgical Instruments

124

133

(7)

Petroleum Products

672

673

(0)

Molasses

25

39

(37)

C

Development Categories

1,029

993

4

Fish & Fish Preparations

157

154

2

Fruits & Vegetables

133

133

(0)

Chemical Products

315

360

(12)

Engineering Goods (Incl. Cutlery)

217

202

8

Marble & Granite/ Onyx Manf.

22

17

31

Gems & Jewellery

32

16

98

Meat & Meat Preparations

33

15

118

Poultry/ Eggs Elbumn Etc

0

2

(72)

Cement

107

85

26

Furniture's

9

9

(5)

D

All Others

1,066

851

25

GRAND TOTAL

13,909

13,457

4

MAJOR SUPPLIER TO ADDITIONAL EXPORT EARNINGS

The major contributor to the current fiscal year's 2006-07 (July-April,) exports earnings are Textile & Garments Category which grew by 6.00% and contributed to 116.00 percent in additional export earnings. Its share in the total exports also conquered at 64.04 percent. The second major contribution has come from the exports of Development Categories which registered a growth of 4.00 percent and contributed to 8.01 percent in additional export earnings. The export of "All Others" group showed a rise of 25.00 percent and contributed to 47.25 percent in increased export earnings. The exports under category Other Core Categories have showing a decline of 10.00 percent with a negative contribution of 17.2 percent to the increased export earnings.

MAJOR CONTRIBUTOR TO ADDITIONAL EXPORT EARNINGS
(July-April, 2006-2007)

 

NET CHANGE $ MILLION

% CONTRIBUTION

% SHARE IN TOTAL-EXPORTS

Additional Exports

452

100

100

Textile & Garments Category

524

116

64.04

Other Core Categories

-322

-71.2

21.00

Development Categories

36

8.01

7.40

All Others

214

47.25

7.66

MONTH-WISE EXPORTS

Monthly exports during July-April, of current fiscal year 2006-07 have been higher than the corresponding months of last year, with the exclusion of September, October, and January 2007 when it declined as 4.75%, 4.71% and 4.01% respectively. Exports averaged $ 1,391 million per month during the first ten months of the current fiscal year as against $ 1,345.7 million of the comparable period last year. In other words, on average, exports have been higher by $ 45.3 million per month during this period. The quarter-wise estimates suggest that exports grew by 2.41 percent in the first quarter (July-September) and continued to accelerate thereafter, growing by 6.68 percent in the second quarter (October-December), while in the third quarter (January-March) it was marginally decline shows by 0.96% and 3.73% percent in the month of April, 2007.

MONTH-WISE EXPORTS

MONTH

2006-2007

2005-2006

% CHANGE

July

1,342

1,269

5.72

August

1,499

1,401

6.98

September

1,413

1,483

-4.75

October

1,263

1,325

-4.71

November

1,375

1,113

23.48

December

1,517

1,455

4.21

January

1,176

1,225

-4.01

February

1,296

1,229

5.45

March

1,533

1,513

1.34

April

1,497

1,443

3.73

Average

1,391

1345.7

3.744

1st Qtr (Jul-Sep)

4,253

4,153

2.41

2nd Qtr (Oct-Dec)

4,154

3,894

6.68

3rd Qtr (Jan-Mar)

4,005

3,967

0.96

DIRECTION OF EXPORTS

Pakistan is trading with a large number of countries but its exports are highly concentrated in few countries, more then 60.00% of Pakistan's exports during Jul-Feb 06-07 to Jul-Feb 05-06 went to eight countries namely, USA, UAE, UK, Afghanistan, Germany, Hong Kong, Italy and China. Among these countries, the share of Pakistan's exports to USA has been rising constantly i.e. 25.36% of current FY 2006-07. The share of exports to Afghanistan, UAE, Germany, UK, Hong Kong, Italy and China remained almost stagnant with minor fluctuations.

PAKISTAN'S EXPORT PLAN:

The Exports Plan is focused on pushing current exports-to-GDP ratio from 13% to 15% of GDP or $16.5 billion to $45 billion by 2013. This export plan would provide a short, medium and long-term road map for enhancing the country's exports, throughout spreading and achieving competitiveness.