PAKISTAN EXPORTS & IMPORTS

S.KAMAL HAYDER KAZMI,
(feedback@pgeconomist.com)
Research Analyst
, PAGE
Jan 31 - Feb 6, 2011

The global economic downturn affected world output and trade volumes adversely during 2009. Amid still-difficult global economic conditions, large costs to exports imposed by the war on terror, and a severe energy crisis faced by Pakistan's economy, the external sector witnessed an overall improvement during 2009?10. This recovery was mainly contributed by a sharp narrowing of the current account deficit which more than offset the declining financial account surplus during the period. In addition, macroeconomic stabilization measures taken by the government also significantly contributed to overall improvement in the external sector of Pakistan.

Exports from Pakistan during December, 2010 amounted to Rs182,263 million (provisional) as against Rs151,984 million (provisional) in November, 2010 and Rs131,557 million during December, 2009 showing an increase of 19.92 per cent over November 2010 and 38.54 per cent over December 2009.

In terms of US dollars, the exports in December 2010 was $2,127 million (provisional) as compared to $1,777 million (provisional) in November 2010, showing an increase by 19.69 per cent and by 35.79 per cent as compared to $1,566 million in December 2009 . Exports during July-December, 2010 totalled Rs940,491 million (provisional) as against Rs755,830 million during the corresponding period of last year showing an increase of 24.43 per cent. In terms of US dollars, the exports during July-December 2010 totalled $10,976 million (provisional) as against $9,099 million during the corresponding period of last year showing an increase of 20.63 per cent.

Main commodities of exports during December 2010 were cotton yarn (Rs19,914 million), cotton cloth (Rs17,170 million), knitwear (Rs15,321 million), Bed wear (Rs13,811 million), readymade garments (Rs13,133 million), rice others (Rs12,092 million), rice basmati (Rs5,823 million), petroleum top naphta (Rs4,748 million), art, silk and synthetic textile (Rs4,741 million) and towels (Rs4,652 million).

Exports recorded growth of eight per cent during July-April 2009?10 on the back of recovery in export markets of the country, exchange rate depreciation, and improved production of crops. Moreover, during July-April 2009?10, export receipts of the country surpassed the full year official target of six per cent exports growth for 2009?10. While, imports into Pakistan during December 2010 amounted to Rs321,486 million (provisional) as against Rs267,326 million (provisional) in November 2010 and Rs244,241 million during December, 2009 showing an increase of 20.26 per cent over November 2010 and of 31.63 per cent over December 2009.

CHANGE OF INDICES IN %

INDEX 2010-11 2009-10 2008-09
CPI 14.61 10.31 24.43
SPI 19.27 9.76 30.96
WPI 22.33 5.25 27.98
Average July-Dec over same period of previous year

In terms of US dollars, the imports in December 2010 was $3,751 million (provisional) as compared to $3,125 million (provisional) in November 2010, showing an increase of imports by 20.03 per cent and by 29.01 per cent as compared to $ 2,908 million in December 2009. Imports during July -December 2010 totalled Rs1,638,659 million (provisional) as against Rs1,328,660 million during the corresponding period of last year showing an increase of 23.33 per cent. In terms of US dollars, the imports during July-December 2010 totalled $19,126 million (provisional) as against $15,994 million during the corresponding period of last year showing an increase of 19.58 per cent. Main commodities of imports during December, 2010 were petroleum products (Rs78,041 million), petroleum crude (Rs27,413 million), palm oil (Rs16,208 million), plastic materials (Rs10,078 million), sugar (Rs9,050 million), iron & steel (Rs7,898 million), raw cotton (Rs7,195 million), electrical machinery & apparatus (Rs6,642 million), paper & paper board & manufacture (Rs6,079 million), and power generating machinery (Rs5,721 million).

On the other side, Pakistan's merchandise trade deficit was improved by 13.9 per cent in July-April 2008?09 from $14,218 million to $12,238 million during July-April 2009?10. Unlike last year when the decline in trade deficit was mainly contributed by massive fall in import expenditures due to decline in international prices, this year's improvement in trade deficit remained broad based, with both exports and imports contributing to the decline. However, exchange rate depreciation, reduced imports prices, and slower domestic demand remained the major factors behind the decline in imports during the same period. The import bill of the country was decreased by 2.8 per cent during July-April 2009?10 over the comparable period of last year. The narrowing trend in monthly trade deficit started to reverse since December 2009 when it deteriorated by 59.9 per cent and reaching at 41.9 per cent deterioration in the month of March 2010. However, trade account of the country once again witnessed an improvement of 13.9 per cent in the month of April 2010 over the same month last year. Currently, the balance of trade in December 2010 was (-)139,223 million in terms of Rupees and (-)1,624 million in US dollars. The balance of trade figures cumulative from July-December 2010 were (-)698,168 million in terms of rupees and (-)8,150 million in US dollars.

CONCLUSION

The economy's ability to achieve sustainable recovery remains constrained owing to slow progress in the prevailing security and economic conditions. The key economic variables impeding stabilization and thereby growth are high and persistent inflation, continuing fiscal slippages and unresolved power sector issues. The strict trade policy should be taken for increasing exports and decreasing imports.