Despite rupee devaluation: Pak exports decline by 11.3pc in March

ISLAMABAD: Despite devaluation of Pakistani rupee and government giving incentives to export sector, the country’s sale of goods to outside world declined by 11.13 percent in March 2019 to $1.979 billion.

Last year in the same month the exports were $2.227 billion, the Pakistan Bureau of Statistics (PBS) Wednesday reported. Imports in the month under review also declined by 20.88 percent to $4.155 billion against what was recorded $5.25 billion in corresponding month of last year.

Economists say that though Pakistani rupee has devalued by more than one-third since December 2017, but neither had exports shown a sizable growth nor had imports been contained. It is worth mentioning in June 2018, a dollar was equal to 119 rupees and now it is more than Rs141 a dollar, indicating an 18 percent devaluation of the rupee against greenback.

It is worth mentioning that devaluation of rupee was the demand of the International Monetary Fund (IMF) to get over the ballooning trade deficit issue.

While comparing the PBS monthly figures with the previous month, exports increased by 4.76 percent over February 2019’s figure of $1.889 billion. Imports, however, reduced by 0.6 percent over February 2019 when it was recorded at $4.18 billion.

During the nine-month period (July-March 2018/19), Pakistani goods exports increased by only 0.11 percent to $17.08 billion, while imports were down by 7.96 percent to $40.75 billion over the same period of the last financial year.

This is depicting a trade deficit (an excess of imports over exports) of huge $23.67 billion, the economy has racked up during the period under review. Over the same period of last financial year, the deficit was $27.21 billion which has now come down to $23.67 billion. This depicts 13.02 percent or ($3.54 billion) reduction in the deficit.

According to the Pakistan Bureau of Statistics (FBS) figures, during the last fiscal year 2017/18, cumulative exports were recorded at $23.22 billion while imports were $60.867 billion with trade deficit of huge $37.64 billion.

Economic experts say that major factors of slowdown in foreign economies and decline in price of commodities do not exonerate the local industry and the government itself from their responsibilities of taking up due steps for boosting exports, as Pakistan cannot wait for the United States, EU, China and middle eastern economies to pick up and increase their demand for Pakistani products.

Since 2003, Pakistan has been running consistent trade deficit mainly due to high import of energy. Interestingly, since 2012, China has taken the place of United States as the largest trade partner of Pakistan. The biggest trade deficits in recent years were recorded with China, India, UAE, Saudi Arabia, Kuwait and Malaysia.

Some economists also believe that beside other factors, currency devaluation plays role in increasing exports and curtailing imports. It makes Pakistani products less costly in foreign markets, attracting them to import from Pakistan at comparatively low price. For Pakistani importers this meant payment of more rupees to import products.

This continuous reduction in exports indicates towards shrinking economy with low economic activities at home and less exportable items to offer in the international market, analysts opined.