Exports increase 14pc to $22.6bln in July-May

ISLAMABAD: Pakistan’s exports increased 14 percent to $22.6 billion in the first 11 months of the current fiscal year, showing their fast returning to pre-pandemic level, commerce ministry’s data showed on Wednesday.

Adviser to Prime Minister of Pakistan for Commerce and Investment Razak Dawood attributed the growth to exporters’ efforts.

“This is an increase of $2.762 billion and the credit goes to our exporters for maintaining the momentum of our exports during a year marred by contraction and uncertainty in our major markets,” Dawood wrote on Twitter.

The 11-month exports have come close to the level ($22.9 billion) recorded in 2018/19.

In May, exports increased by 18.7 percent to $1.65 billion as compared to $1.39 billion in May 2020.

“The dip in exports to below 2 billion mark is because of extended EID holidays which was done to curtail the spread of COVID during EID time,” added Dawood. The World Bank, however, expected net exports to decline this fiscal year as export volumes are projected to contract, while import volumes grow in line with the domestic demand recovery.

“Export values are projected to decline in FY21 amid weak global demand, whereas import values are projected to grow in line with the recovery in domestic economic activity,” the Bank said in its latest country economic update.

The World Bank expected Pakistan’s exports to grow from the next fiscal year onwards, “as external conditions become more conducive and tariff reforms gain traction, but imports are also expected to increase in line with stronger domestic activity and higher oil prices”.

It advised the government for tariff reforms to encourage exports growth and support to competition by reducing the anti-export bias of trade policy.

The World Bank said Pakistan’s missing merchandise exports are estimated at $61 billion. This results from comparing actual merchandise export levels with the potential that emerges from the estimation of a gravity model of trade.

“Given Pakistan’s observable characteristics in terms of economic size, level of development, remoteness, and factor endowments, it is estimated that Pakistan’s potential exports are at $88.1 billion, about 4 times the actual current level.”

The World Bank says Pakistan’s annual per capita growth has averaged only 2 percent, “less than half of the South Asia average, partly due to inconsistent macroeconomic policies and an under-reliance on investment and exports to drive economic growth”.