Exports achieve 16.5pc growth – set to contribute additional 0.8pc to GDP

ISLAMABAD: The increasing exports trend since June 2017, continued during February, by achieving the highest monthly growth in the fiscal year by posting 16% increase in dollar terms and 22% increase in rupee terms, in comparison to the exports in February 2017.

The current year’s export performance has already contributed additional Forex inflows of around USD 1.5 bn during the first eight months and is expected to reach the figure of additional USD 2.5 bn, during 2017-18. This increase in economic activity in external sector reflects an increase of 0.8% of GDP, a statement issued by the ministry of Commerce said.

This means additional around Rs. 280 bn of incomes to trade, industry, agricultural sectors and the resultant additional employment.

These results have been achieved due to the export-friendly policies and incentives of the government and the renewed efforts towards seeking better market access by the Ministry of Commerce. The positive trend in the international demand and exchange rate correction are also expected to help sustain this rising trend in the coming months.

The imports have also responded to the steps taken to check the surge in consumer goods inflows since past few years.

The imposition of Regulatory Duties on 355 non-essential consumer items by ECC on the proposal by Ministry of Commerce, resulted in reduction in the imports of these goods by 16%, while the FBR revenue registered an increase, the statement added.

However, since the large chunk of imports comprise of essential goods such as fuels and edible oil, which has been affected by the rising trend since July 2017, the impact of the reduced imports of non-essentials is being offset.

The imports of machinery and raw materials, essential for economic growth also contribute to the gap in the balance of trade. However, despite all these pressures, the increase in imports has been only 9.7% during February 2018 as compared to February 2017, bringing down the trade deficit by 21% from USD -3636m in Jan 2018 to USD -2895m in February.