Commerce Minister Humayun Akhtar Khan on Thursday said that increasing trade deficit was not an alarm bell for the government since all other indicators were showing positive trend to take exports to new heights in coming years.
Khan told a press conference here that trade deficit soared during 2003-04, but was never out of control. He said import of raw material and capital goods were two major reasons of widening trade gap, but being engine of economic growth, import of these items were not a cause of worry for the government.
The minister expressed satisfaction that Pakistan's exports were increasing continuously since 2000-01, and the same trend will continue in the future.
The minister said that Islamabad was pursuing the policy of signing Free Trade Agreements (FTA) and Preferential Trade Agreements (PTA) with its important trade partners to secure an important position in the global market.
He counted Sri Lanka, Bangladesh, USA, Iran, Turkey and several other countries with whom Pakistan either have signed or will likely to sign FTA or PTA in near future.
According to the minister, Pakistan's exports maintained an increasing trend since 2000-01.
An overview of the country's exports issued by the minister showed that in 2003-04, exports were recorded at $12.3 billion against target of $12.1 billion, showing an increase of 9.5 percent over the preceding year.
Exports break-up of the first eleven months of the outgoing fiscal indicated that exports increased to $11.1 billion compared to $9.9 billion for the corresponding period of 2002-03.
Textile sector remained atop as usual to take the country's exports to new heights during the first 11 months of the fiscal 2003-04, which registered 12 percent increase to take $6.66 billion in July-May last year to $7.46 billion in July-May 2003-04.
Within the textile sector, the highest growth has come at 29 percent in the value-added knitwear category, increasing from $1 billion to $1.3 billion. This is followed by 26 percent growth in cotton fabrics, increasing from $1.8 billion to $2.2 billion.
Two other billion-dollar categories are cotton yarn whose exports increased by 22 percent from $0.9 billion to $1.1 billion, and bed linen that grew by 7 percent from $1.18 billion to $1.26 billion. Exports of towels increased by 17 percent from $323 million to $377 million.
The minister said textiles sector was Pakistan's core category. In other core categories, the important ones were rice, leather and leather products, carpets and rugs and POL products.
Rice exports increased, in value terms, by over 10 percent from $507 million to $560 million, but basmati rice exports actually increased by over 18 percent from $327 million to $388 million.
Leather exports increased marginally by 3 percent to $216 million. There was a larger increase of 6 percent in leather garments from $338 million to $359 million. Leather footwear also increased by 6 percent to $69 million.
Hand knotted carpets exports also surged during 2003-04. It showed over 11 percent increase and reached to $211 million.
Exports of POL products have continued to increase by 18 percent from $207 million to $245 million. Meat exports increased 54 percent and reached to $14 million mark.
In the developmental categories, the highest increase was recorded in engineering goods, increasing by 36 percent. Exports of fruits increased by 24 percent and reached to $92 million, and of vegetables, to $22 million.
According to the minister, fish exports have also maintained an increasing trend. It showed 13 percent increase and reached to $140 million.
Pharmaceuticals exports also increased by 14 percent from $39 million to $45 million.
Exports of gemstones surged by 60 percent. Exports of jewellery increased by 10 percent.
Exports of information technology products and services are gaining ground. Up to April 2004, it showed increase in exports of 42 percent.
In other categories, the most significant is cement of which the exports have increased remarkably by 162 percent.
Animal casings also surged by 40 percent. Tobacco exports increased more than 200 percent.
The current increase in imports is largely a function of increased economic activity as reflected in the significant growth in the import of capital goods (28.8 percent), and raw material for capital goods (38.4 percent).
Increase in the import of machinery group is attributed due to a significant rise in the import of aircraft, ships and boats, which increased to $409.2 million during July-May, 2003-04 from $68.1 million during the corresponding period of last year, registering an increase of 500.9 percent.
The overall increase in the machinery group is 35.4 percent; metal group 30.5 percent; chemical group 24.3 percent; miscellaneous group 17.8 percent; and food group 4 percent.