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Trade deficit narrows 23pc in October

Business

November 4, 2020

ISLAMABAD: Trade deficit narrowed around 23 percent year-on-year in October to $1.58 billion in October as textile value-added exports showed improvement, while imports were down relatively sharply, commerce ministry’s data showed on Tuesday.

Exports increased 2.1 percent year-on-year to $2.06 billion last month. They amounted to $2.02 billion in October last year. There has been a contraction of 10.3 percent in imports that dropped to $3.65 billion from $4.07 billion.

The monthly trade deficit improved by $463 million compared to the corresponding month a year earlier, according to the official data shared during a meeting held to review the export trends. The commerce ministry didn't disclose month-on-month trade trend.

Adviser to the Prime Minister on Commerce and Investment Razak Dawood presided over the meeting.

“Pakistan economy will continue on its upward recovery trend,” said Dawood. “The officials of ministry continue to proactively facilitate exporters and businessmen. No efforts should be spared to counter the effect of the second wave of COVID-19 in Pakistan’s major export markets.”

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.

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. In July-October, exports marginally decreased 0.1 percent. Exports during the period stood at $7.54 billion compared to $7.54 billion during the same period last year. Trade deficit in the first four months of the current fiscal year contacted 4.5 percent to $7.42 billion from $7.77 billion.

“Pakistan’s exporters made it possible for bringing the exports to pre-COVID-19 levels despite uncertainty and contraction in Pakistan’s major markets,” said the adviser.

Export increases were mostly in the value-added sectors. The increases were witnessed in home textiles (10 percent), women's garments (20.8 percent), jerseys and pullovers (35.3 percent), made-up articles of textile (10.4 percent), stockings and socks (19.2 percent), cement (10.8 percent), pharmaceutical products (26.8 percent), tarpaulins (66.8 percent), and made-up clothing accessories (245.2 percent).

Exports of mostly non-value-added products decreased during the July-October period. Cotton fabric exports were down 8 percent. Exports of cotton yarn fell 40.1 percent. Worn clothing exports dipped 63.6 percent. Exports of raw leather slipped 38.4 percent. Crude petroleum exports dipped 53.7 percent. Exports of cotton sharply fell 95.7 percent.

Pakistan’s top five growing markets during July-October were Indonesia with 39.3 percent share, followed by Qatar 34.5 percent, Denmark 24.9 percent, South Korea (22.5 percent) and Afghanistan (15.6 percent).