IMPORTS OF PAKISTAN
S.KAMAL HAYDER KAZMI,
Research Analyst, PAGE
Oct 12 - 18, 2009
Pakistan's major imports are petroleum products, machinery, chemical products, foods, palm oil, iron & steel, plastic materials, fertilizer, raw cotton, and transport, etc.
Pakistan's imports registered a negative growth of 10.5 percent in FY 2008-09. The imports stood at $31.68 billion in 2008-09 as against $35.4 billion in FY 2007-08. The growth in imports reflects impact of substantial fall in oil and food imports in monetary terms and these two items were responsible for 80 percent of additional imports bill last year.
Import compression measures coupled with massive fall in international oil prices have started paying dividends and imports witnessed marked slowdown during the last two months.
IMPORTS IN JULY-AUGUST
Imports during August, 2009 amounted to Rs.209,268 million as against Rs.216,431 million in July, 2009 and Rs.257,012 million during August, 2008 showing a decrease of 3.31% over July, 2009 and of 18.58% over August, 2008. In terms of US dollars the imports decreased by 4.20% in August, 2009 to $2,528,258 thousands as compared to $2,639,203 thousands in July, 2009 and by 26.92% as compared to $3,459,455 thousands in August, 2008.
Imports during July-August, 2009 totaled Rs.425,699 million as against Rs.507,525 million during the corresponding period of last year showing a decrease of 16.12%.
In terms of US dollars the imports during July-August, 2009 totaled $ 5,167,461 thousands as against $7,008,314 thousands during the corresponding period of last year showing a decrease of 26.27%.
Main imported commodities during August, 2009 were petroleum products (Rs.41,761 million), petroleum crude (Rs.19,044 million), plastic materials (Rs.8,029 million), palm oil (Rs.7,996 million), iron & steel (Rs.7,293 million), power generating machinery (Rs.6,820 million), fertilizer manufactured (Rs.5,574 million), electrical machinery & apparatus (Rs.4,425 million), medicinal products (Rs.4,092 million), and aircrafts, ships & boats (Rs.3,240 million).
%CHANGE FOR VALUE IN MILLION RUPEES IN AUGUST, 2009 OVER
. JULY, 2009 AUGUST, 2008 Petroleum products 3.99 1.21 Petroleum crude -16.48 -63.45 Plastic materials 23.71 -5.35 Palm oil 39.45 -25.26 Iron & Steel 4.07 -7.60 Power generating machinery -1.86 -31.33 Fertilizer manufactured 54.32 85.99 Electrical machinery & apparatus -28.47 -16.70 Medicinal products -32.14 27.95 Aircrafts, ships & boats 261.61 246.15
Pakistan's economic environment is affected by intensification of war on terror and deepening of the global financial crisis, which penetrated into domestic economy through the route of substantial decline in Pakistan's exports and a visible slowdown in foreign direct inflows.
Although contraction in export receipts is more than compensated by massive import compression emanating from global crash of crude oil prices, the external sector vulnerabilities needs a review.
The global economic slowdown is making inroads into real economy through contraction in demand in the export sector and as well as shrinkage of external inflows. Pakistan's economy continues to remain exposed to the vagaries of international developments as well as internal security environment. The intensity of the global financial crisis has further added to Pakistan's predicament. Despite support from the IMF and other bilateral and multilateral donors, Pakistan's external account remains exposed to a host of uncertainties.
% SHARE IN IMPORTS BY MAJOR COUNTRIES
COUNTRIES JUL-08 to APR-09 JUL-07 to APR-08 Saudi Arabia 12.43 12.68 China 11.76 11.79 United Arab Emirates 9.30 8.45 Kuwait 6.88 6.69 U.S.A. 4.95 6.66 Malaysia 4.49 3.72 Germany 3.72 3.11 Japan 3.61 4.48 India 3.41 4.46 United Kingdom 2.67 1.88 Iran (Islamic Rep.) 2.49 1.55 Indonesia 2.46 2.70 Italy 2.31 1.43 Russian Federation 1.94 0.82 Korea, Rep of 1.83 1.72 Thailand 1.66 1.51 Singapore 1.58 1.91 Australia 1.42 1.42 Qatar 1.35 1.67 Morocco 1.26 0.51 Others 18.48 20.86
During the last fiscal year, the stress on macroeconomic stability mainly emanated from unsustainable fiscal deficit and adverse balance of payments position, the falling value of rupee, escalating food and non-food inflation, and structural problems like power shortages resulting in perceptible slowdown in economic activity.
Unfortunately, the Economic Monitoring Committee (EMC) and SBP have failed to curtail the import volume of the country as they are considering bringing down trade deficit volume. During the last five years, Pakistan's imports have increased more than twice, which is alarming for Pakistan's economy. Therefore, the government must ban the imports of luxurious items immediately in order to decrease trade deficit.