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October 3, 2020

Exports rebound 6pc to $1.87bln in September

Business

October 3, 2020

ISLAMABAD: Pakistan’s exports have rebounded in September after a double-digit fall in August as lifting of lockdown is leading to clearance of export orders in backlog and economic activities are adjusting to the new normal.

Adviser to Prime Minister on Commerce Razak Dawood on Friday said exports grew six percent year-on-year to $1.87 billion in September.

“Although this is better than decrease of 15 percent in August 2020, I still feel that with sufficient backlog of orders we can do much better,” Dawood informed through Twitter.

In August, exports fell to $1.58 billion from $1.86 billion in the corresponding month a year earlier.

Exports showed first recovery in July after consecutive downtrends since March amid coronavirus lockdown. Ease in lockdown paved way for clearance of orders stuck on ports.

The adviser said the exports sector has a potential to further increase the numbers.

“Besides executing current orders I urge the exporters to pursue more orders from existing markets and reach out to untapped markets,” he said. “I am hopeful that in October 2020 we will have further growth.”

Global lockdowns related to coronavirus pandemic upended the world’s economy. Economic activities came to halt and ports were chocked with cargoes unmoved due to slowdown in transportation.

Pakistan’s economy that was already tottering before the coronavirus was further mauled by monthslong lockdown. The growth is expected to recover at 1 to 1.5 percent this fiscal year after contraction in the previous fiscal year.

Exports continued to show contraction since the government took charge. Trade deficit narrowed 27.1 percent to $23.1 billion in the last fiscal year of 2019/20, but the reduction was mainly caused by suppressing imports rather than export sector’s recovery. Exports declined 6.8 percent to $21.3 billion, whereas imports sharply fell 18.6 percent to $44.5 billion during the last fiscal year.

The incumbent government resorted to curtail imports and mobilise foreign funds to improve balance of payments position since it took over in August 2018. The International Monetary Fund’s loan program opened up inflows from other multilateral and bilateral foreign institutions to currently elevate the foreign exchange reserves to near $19 billion from $14.4 billion till end of the last fiscal year. However, exports to GDP ratio is teetering below 10 percent.

The government was asked to improve marketing efforts in the international markets, create competitive packaging and build value-chain in destination countries. This was one of the basic factors behind India’s export success, said a businessman.