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Despite currency devaluation & subsidies exports decline

Despite currency devaluation & subsidies exports decline

ISLAMABAD: Despite currency devaluation and subsidies offered to various sectors, the country’s exports declined by 1.54 per cent during April, according to latest data released by the Pakistan Bureau of Statistics (PBS) on Thursday.

PBS data shows that exports during the month of April declined to $2.094 billion compared to $2.127bn during the same period last year.

Moreover, export proceeds during the first 10 months of the current fiscal year also fell by 0.12pc to $19.169bn compared to $19.191bn last year. Cumulatively, in rupee terms, exports recorded 23pc growth during the period under review.

The country’s exports have declined since February despite claims by the Commerce Division that the steps taken by government including currency devaluation, subsidies to export-oriented sectors will likely result in improving overall proceeds.

Last week, Adviser to Prime Minister on Commerce Razak Dawood also shared his concern over the falling proceeds. He said that “exports are not showing growth the way we were expecting,” adding that the trend might reverse in the next few months.

This decline comes despite China’s decision to allow $1bn worth of additional market access to products including rice, yarn etc at zero duty in the current fiscal year. Of these, traders have exported $300m worth of commodities so far.

In addition to this, the government had also extended cash assistance to major sectors, mainly textile and clothing but these measures too failed to boost exports.

On the other hand, total imports during the 10 months fell by 7.88pc to $45.471bn from $49.360bn during the same period last year.

However, during April, imports declined by further 6.42pc to $4.753bn, from $5.079bn in same month last year.

As a result of higher decline in imports, the trade deficit also fell to $26.302bn in July-April period this year from $30.169bn over the corresponding months of last year, reflecting a decline of 12.82pc. The government’s corrective measures vis-à-vis imports are finally bearing fruit in the shape of decline in trade deficit.

On a monthly basis, trade deficit dipped by 9.93pc to $2.659bn in April, from $2.952bn over same month last year.

The decline in deficit — decreasing by $3.867bn during July-April — is estimated to reach around $5-6bn by the end of the ongoing fiscal year.

This contraction is mainly attributable to a steep fall in the overall import bill even though export proceeds posted a mixed trend during the period under review.