ISLAMABAD: Exports jumped to a record high in July as overseas demand for textile products extended export growth, supporting an economic recovery facing headwind from the Covid outbreak.
Abdul Razak Dawood, adviser to Prime Minister on Commerce said the country’s merchandise exports increased by 17.3 percent to $2.35 billion in July. The advisor made the announcement via social media platform Twitter.
“During the first month of this financial year (July), our exports grew at 17.3 percent to $2.35 billion as compared to $2 billion in July 2020," Dawood said while taking to his official Twitter handle. "These are the highest ever exports in the month of July.”
The advisor urged "exporters to move full speed ahead to make 2021-22 another record-breaking year for our exports”. It is to be noted that during FY21, Pakistan’s exports were recorded at $25.304 billion (highest in last 10 years) against $21.39 billion in FY20.
Exports performed well, but analysts said impact of drastic rupee devaluation during last three years cannot be excluded. On Monday, Pakistani rupee hit a nine-month low and dollar hiked to 163.35 in the interbank market.
The rupee devaluation makes Pakistani products cheaper outside the country. But, at the same time, it makes world’s products, including crude oil and petroleum, food items and others, costlier for Pakistanis to import, resulting in inflation.
During the last fiscal, imports were recorded at $56.405 billion, with trade deficit of $31.1 billion. It is worth mentioning that in FY20, the exports were $21.39 billion, while imports $44.55 billion.
This depicted a deficit of $23.159 billion. The reduction in deficit was made due to the government policy of limiting imports. Although, it helped reining in the current account deficit (CAD), at the same time it also marred the GDP growth.
After sensing the negative repercussion of the restrictive policy, the government in FY2021 relaxed its policy and allowed imports of various raw materials and other products that again spiked imports and trade deficit.
Analysts believe that in Pakistani economy, there is always a trade-off between CAD and GDP growth. Unless the exports are substantially increased, this sea saw will continue and the government will either go ahead with growth or rein in CAD to financially safeguard itself on the external front. —