Exports swell 17.5% to $2.47 billion

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Exports of the country recorded a growth of 17.5% and reached $2.471 billion in October 2021 against $2.104 billion in the corresponding month of previous year, announced Adviser to Prime Minister on Commerce Abdul Razak Dawood.

“This is the highest-ever export number in any October in our history,” he stated in a tweet on Monday. However, the adviser noted that foreign shipments fell short of the target of $2.6 billion for October 2021.

He pointed out that the country’s exports grew 25% to $9.468 billion during July-October 2021 compared to $7.576 billion in the same period of previous year.

The PM aide highlighted that Pakistan had fixed a target to ship merchandise worth $9.6 billion abroad in the four-month period.

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Moving on to import figures, he revealed that they jumped 64% to $24.99 billion in July-October 2021 compared to $15.19 billion in the corresponding months of 2020.

According to the adviser, about 40% of this increase was driven by investment (in capital goods, raw material and intermediate goods), which indicated expansion and enhanced activity in the industrial sector.

The remaining 60% of imports comprised petroleum products, coal and gas (34%), vaccines (11%) and food (8%).

“Most of this is inelastic in nature,” he noted. “In absolute terms, the net increase in imports over this period is $9.801 billion.”

Out of the total, consumer goods amounted to $239 million, food items $823 million and capital goods $1.6 billion.

Topline Securities Head of Research Atif Zafar told The Express Tribune that the robust export figure for October 2021 would ease concerns over the balance of payments, however, he stressed the need for further improvement in that regard.

“Trade deficit in the month under review is estimated at about $3.77 billion,” he said. “Some improvement was seen over last month as imports declined 5% compared to September 2021.”

He was of the view that the government should clearly mention the quantity and value of vaccines imported every month. Citing the reason for that, he stated that imports of vaccine were funded by international agencies, therefore, the deficit was slightly misleading.

Arif Habib Limited Head of Research Tahir Abbas noted that the trade deficit contracted 10.5% on a month-on-month basis, indicating a slight betterment on the external front.

The measures taken by the State Bank of Pakistan (SBP) and the government to curb the inward shipments of luxury and non-essential goods are expected to start reflecting in the import figures soon, which will narrow down the trade deficit.

Union of Small and Medium Enterprises (Unisame) President Zulfikar Thaver emphasised that despite the upbeat trade data, inflation was on the higher side due to hoarders and profiteers, who created artificial shortage of commodities.

“Inflation is also caused by a surge in the cost of production and expensive logistics,” said Thaver. “At one point, we were talking about a strategic export policy to steer export surplus.”

Moving on to imports, he lamented that Pakistan began ordering wheat from abroad to meet domestic demand.

He pointed out that the country imported medicines which were either not manufactured locally or produced in a lower quantity compared to demand.

The government is focusing on enhancing exports. In this regard, the second Pakistan-Africa Trade Development Conference will be held in Nigeria later this month.

It will focus on geographical diversification of Pakistan’s exports. A single-country exhibition will also be held at the same time.

So far, 113 Pakistani companies from textile, cosmetics, leather, food, pharmaceutical, tractor manufacturing and electrical appliances sectors have confirmed their participation in the event.

Dawood will lead Pakistan’s delegation and the country’s firms will exhibit their products in the single-country exhibition and hold business-to-business meetings.

Published in The Express Tribune, November 2nd, 2021.

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