COUNTRY'S EXPORTS SHOW GROWTH OF 10.2 PERCENT DURING 10 MONTHS OF 2007-08
June 16 - 22, 2008
LAHORE: The country's exports increased from US $13847.3 million to US $15255.5 million and recorded a growth of 10.2 percent during the first ten months (July- April) of the current fiscal year (2007-08) against 3.6 percent in the same period of last year.
According to Economic Survey for the year 2007-08, the impressive export performance backtracked to dismal in 2006-07 when they were hardly managed to grow at less than 4 percent.
It says Pakistan's exports were growing at 16 percent per annum on the back of strong macroeconomic policies pursued at home and the hospitable international trading environment the period (2002-03 to 2005-06).Although, exports growth has remained far short of the average growth of 16 percent achieved during 2002-03 to 2005-06, but it was satisfactory when viewed in the backdrop of poor show last year.
On the other hand, imports during the first ten months (July-April) of the current fiscal year (2007-08) grew by 28.3 percent as compared with the same period of last year, reaching to $ 32.06 billion. After growing at an average rate of 29 percent per annum during 2003-04, Pakistan's import growth slowed to a moderate level of 6.9 percent in the last fiscal year (2006-07). Import's growth exhibited a sharp pick up in 2007-08 on the back of an extra- ordinary surge in the imports of petroleum products, food and raw material, the document says.
Non-oil imports were up by 22.5 percent and non-oil and non food imports spiked by 18.8 percent during the first ten months (July-April) of the current fiscal year. Imports of the petroleum group registered extraordinary growth of 47 percent and reached to $8670 million. The petroleum group accounts for 27 percent of total imports but contributed 39 percent in the overall growth of imports for the year. The rise in imports of the petroleum group has been the fallout of extraordinary hike in the crude oil prices in the international market as well as the substantial increase in its quantity imported. The imports of raw material contributed almost 21 percent to this year's rise in import bill. This is followed by imports of food group which contributed 16 percent to the overall imports growth, the survey reports adds.
Imports of petroleum products and edible oil contributed 47 percent to the additional import bill in FY 2007-08. Additional 18.7 percent contribution came from the import of wheat and fertilizer. These four items accounted for two-thirds of imports growth. Consumer durable contribution was negative (0.4%) mainly on account of decline in the import of road motor vehicles, the report says.
According to Survey report, Pakistan's current account deficit (CAD) widened to US$ 11.6 billion during Jul-Apr FY 2007-08 against US$ 6.6 billion in the comparable period of last year, showing an increase of 75.7 percent. Even when compared to the size of the economy, CAD was substantially high at 6.8 percent of GDP during July-April FY 2007-08 as against 4.6 percent for the same period last year. The deterioration of the current account deficit was mainly driven by sharp rise in the trade deficit along with an increase in net outflows from services and income account. Services account deficit widened by 44.2 percent during Jul-April FY 2007-08 to reach US $5.6 billion. This deterioration was contributed by relatively high import growth and the decline in export of services. However, the strong growth in current transfers on the back of impressive growth in remittances almost entirely offset the deficit in services and income account thereby leaving the trade deficit as the fundamental source of expansion in the current account deficit.
The current transfers witnessed an impressive increase of 16.4 percent during Jul- April FY 2007-08 on the back of strong growth in both private and official transfers. The Pak rupee, after remaining stable for more than four years, lost significant value against the US dollar and depreciated by 6.4 percent during July-April 2007-08, it says.
The fall in the value of the rupee is mainly attributed to rising oil prices in the international market, widening of current account deficit and the uncertain political situation in the country, the survey report adds. Worker's remittances registered commendable growth during current year by growing by 19.5 percent on top of 22.7 percent growth in the corresponding period of last year. Worker's remittance totaled $5.3 billion in the first ten months of (Jul-April) of the fiscal year as against $4.4 billion in the same period last year.
Pakistan's total foreign exchange reserves stood at US $12,344 million as on end-April 2008, significantly lower than the end-June 2007 level of US $15,646 million. Reserves peaked to US $ 16,443 million at end Oct-2007.