Exports reduced by $125m in Nov 2018

ISLAMABAD: Despite PTI’s claim of enhancing exports, the official data shows $125 million (6.35 percent) decline in exports in November 2018 as compared to the corresponding period last year.

The country has already witnessed a setback in the form of decline in remittances amounting to $400 million in the month of November 2018, worsening the balance of payments crisis further. In order to resolve the crisis of balance of payment the PTI-led government had announced that the crisis will be avoided through reducing imports and enhancing the exports. However, the official data of Pakistan Bureau of Statistics (PBS) show the exports have declined by 6.35 percent in the month of November 2018 compared to the November 2017.

The government, on the other hand, has also failed to reduce the imports by the same ratio. The official data shows the imports have reduced by only 2.77 percent ($132 million) in November 2018 as compared to the corresponding period of last year.

According to PBS data, Pakistan’s exports in November 2017 were recorded up to $1,968 million but it has declined to $1,843 million in November this year. The data further shows that Pakistan’s exports in October 2018 were recorded up to $1,903 which means the export target in the month of November showed negative growth of $60 million (3.15 percent). Similarly, $4,758 million imports were recorded in November 2017 which now has reduced to $4,626 million in November this year.

The economic experts, who earlier supported government’s measures to reduce imports and increase exports, have expressed their concerns over the economic performance of the PTI-led government. According to these experts, “Both the exports and remittances are primary source of dollar inflow in Pakistan. The crisis of balance of payments might temporarily be postponed as a result of IMF negotiations but the fundamentals depict that it might worsen in future. The mismatch between imports and exports leads to balance of payment issue”.

Though it is difficult to increase the exports within a few months as this needs long term planning but the government could have easily controlled the imports and reduced its volume. However, only two percent decline in the import as compared to 6 percent decline in exports is not a good sign, the experts say.

Though the foreign remittances have increased during last five months but a sudden shortfall of $400 million has surprised many. The overall monthly average of foreign remittances has increased from $1,635 million in first five months of fiscal year 2018 to $1,805 in the corresponding period of fiscal year 2019.

Talking to The News, Spokesperson for the State Bank of Pakistan said the workers’ remittances have increased up to 12 percent during the last five months. However, last month there was a shortfall of $400 million as compared to October 2018.

To a question about the reasons of this shortfall, the SBP spokesperson said no one can predict about the remittances. “There is no such mechanism where we could determine that how much money one will send back to his home”, he said. However, he said the depreciation of rupee might have an adverse impact on the remittances.