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ISLAMABAD: The country's exports have posted 5.8 percent growth in July 2020-21 to $ 1.998 billion as compared to $ 1.889 billion during the corresponding month in 2019-20.

However, growth in exports in July 2020 was far less than the growth in July 2019 when exports recorded an increase of 15.65 per cent to $ 1.90 billion against exports of $ 1.63 billion in July 2018. This shows that exports are still in a negative trajectory in the first month of fiscal year 2020-21 as compared to July 2019 gains with respect to July 2018.

On the import side, a decline of 4.2 percent, in dollar value terms, was recorded in July 2020, as compared to July 2019. The imports stood at $ 3.540 billion in July 2020 as compared to $ 3.696 billion, showing a negative growth of $ 156 million. The trade deficit which was $ 1.808 billion in July 2019-20 has reduced to $ 1.542 billion in July 2020, showing a 14.7 percent improvement in trade balance. The Commerce Ministry has not yet submitted Strategic Trade Policy. Framework (STPF) 2020-25.

According to the Planning Commission expectation of resurgence of global commodity demand in 2020 21 and revival of economic activity after deadly pandemic would be a positive signal for exporters.

However, global demand will be lower than pre-Covid period and Pakistan's exporters will be facing challenging domestic and external environment. Imports demand, despite fall in crude oil prices, is likely to increase marginally but export pick-up will not be able to neutralize it. Resultantly, the trade deficit is projected at 7.1 percent of GDP. Current account deficit is projected at 1.6 percent of GDP in 2020-21with projected growth of exports and imports of 1.5 percent and 1.1 percent, respectively.

The exports recorded 7.2 per cent negative growth during 2019-20 due to Covid across the globe.

On Tuesday, Advisor to the Prime Minister on Commerce and Investment, Abdul Razak Dawood, chaired an internal strategy meeting, to review the recent trade statistics and devise plans for improving the exports.

The meeting reviewed latest statistics of exports and imports, according to which exports posted a growth of 5.8 percent, in dollar value terms, as compared to July 2019.

The meeting noted that the growth was irrespective of a decline in exports for the last four months, since March 2020, when there was a drop of 8 percent compared to the corresponding period last year. This decline widened in April 2020, with a drop of 54 percent in exports, improved but registered a 35 percent decline in May 2020, and improved further to only 6 percent fall in exports in June 2020, as compared to corresponding period last year.

According to Counsel General in Istanbul, Bilal Khan Pasha, during July, 2020, Pakistan exports to Turkey stood at $ 26.4 million. a healthy 5.83 per cent increase over the corresponding period last year. Major products were rice, ethyl alcohol, tents & tarpaulin, surgical instruments and grey fabrics.

The strategies for product and geographical diversification were also reviewed in the meeting chaired by Dawood in context of the recent trade statistics. One of the major sectors which showed good progress is Food Processing sector where a growth of over 300 percent was observed in July 2020. Similar growth was witnessed in Made-Ups and Clothing Accessories sectors. In addition, Fish and Fish Products sector recorded a healthy growth of 50 percent, while Home Textiles sector, which was declining in the previous months, is now back up with 24 percent growth.

In terms of exports, a major decline is witnessed in rice and cement, which fell to 24 percent and 12 percent respectively in July 2020, as compared to same period last year. There is also a decline in the export of raw leather and cotton yarn, which is a clear indication that the Government's policy to pursue value-added exports is showing results.

On the import side, a decline of 4.2 percent, in dollar value terms, was recorded in July 2020, as compared to July 2019. Due to this increase in exports and decline in imports, a 14.7 percent improvement in trade balance was witnessed in July 2020 as compared to July 2019.

On the geographical diversification, not much progress was shown in July 2020 as the exports still seem to be heavily dependent on traditional export markets.

An official statement quoting Abdul Razak Dawood expresses appreciation of exporters as well as the Government departments for coordinating their efforts in these testing times during the ongoing pandemic. He added that this achievement is particularly noteworthy because of the fact that a decline was being observed until the last month and a turnaround of around 12 percentage points has been achieved in just one month.

Dawood contended that the Ministry of Commerce will be evaluating its geographical diversification in order to re-align the focus towards new opportunities.

He also advised the Ministry officers to extend all kind of necessary support to the exporters in order to achieve the targets, not only in terms of numbers but also with regards to intended policy outcomes.

Copyright Business Recorder, 2020

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