Exports seen reaching $24 billion by fiscal year 2011-end

The country's exports are projected to reach $24 billion at the end of current fiscal year which, according to the finance minister, is a good sign for the economy. According to the Economic Survey, merchandise exports rose to $20.2 billion in July-April 2010-11 against $15.8 billion in the same period last year, thereby showing inordinate growth of 27.8 per cent.
The growth in exports remained broad-based as almost all the groups (textile and non-textile) witnessed a high positive growth. However, the lion's share of this year's exports came from textile sector and food group contributing 61.8 per cent and 18.1 per cent respectively to overall export growth during July-April. Group-wise analysis of exports growth suggests that the exports of food group on the back of fish and fish preparations, vegetables, wheat and meat and meat preparation witnessed a growth of 29.1 per cent and absolute increase of $794.6 million to overall exports during July-April 2010-11.
Further details reveal that the overall increase in food group exports was largely a result of both higher unit value prices and substantial quantum increase, though the impact of export prices still remained more significant. Traditionally, Pakistan's exports have been concentrated in a few export destinations such as USA, UK, Germany, Hong, Kong, UAE and Afghanistan. However, a reversal in trend has been observed since FY06. The share of exports to these destinations decreased from 53.7 per cent in 2005-06 to 45 per cent in July-March 2010-11.
The share of remaining countries increased to 55 per cent during July-March 2010-11 as compared to 46.3 per cent in 2005-06. The major contribution to this geographical diversification in export markets came from increased exports to regional countries mainly China and Bangladesh.
Merchandise imports increased to $32.3 billion in July-April 2010-11 against $28.1 billion in the corresponding period last year, thereby showing an increase of 14.7 per cent. The overall import bill was higher by $4.1 billion, reflecting the impact of higher global crude oil and commodity prices.
With the exception of machinery group, the higher import bill was contributed by food group ($1.528 billion), petroleum group ($678.3 million), consumer durables ($247 million), raw material group ($1.039 billion), telecom ($245 million) and on other items group ($951 million).
The price and quantity effects worked out in the same direction however, price effects remained stronger than quantity effect. The imports excluding petroleum group grew by 17.3 per cent and excluding petroleum and food grew by 11.2 per cent. This implies dominant role of food imports. Within the current account, deficit in trade account contracted by 10.8 per cent during July-April 2010-11 over the last year, which remained at $8.285 billion.