Exports plunge 20pc in August

ISLAMABAD: Pakistan’s exports dipped by 19.5 per cent year-on-year in August, data released by the Ministry of Commerce (MoC) showed on Thursday.

During the second month of FY21, export proceeds were reported at $1.586 billion, as against $1.969bn over the corresponding period of last year.

The exports returned to a declining trend after witnessing paltry growth in July. A steep fall was seen in exports since March when the government imposed lockdowns to contain the spread of coronavirus.

In rupee terms, export proceeds dipped 14.9pc year-on-year in August.

Between July and August, exports fell by 7.1pc to $3.584bn, from $3.858bn over the corresponding months of last year.

Despite the decline in overall exports proceeds in August, some of the products such as tractors, iron and steel, chemicals and cement have posted a growth of 186pc, 100pc, 90pc and 30pc, respectively in dollar terms.

Commerce Adviser Abdul Razak Dawood said that rains and consequential urban flooding, particularly in Karachi, caused significant problems to the existing infrastructure, disrupting the supply chains and affecting exports for the month of August.

He further added that power outages, slowdown in business activities, delays in transportation and hampering of port operations are some of the issues faced by the exporters due to unprecedented monsoon rains in the country.

Dawood hoped that exports would begin to recover in September as normalcy should return to Karachi. He noted that although exports have temporarily fallen, the trade balance continues to improve.

“Exporters are encouraged that despite the calamity of rain and flooding, we must pursue ‘Make in Pakistan’ and export led growth”, stated the Advisor. “I have every confidence in our exporters that they will make up for the loss in the subsequent months”, he added.

The adviser directed the MoC must resolve issues of the exporters on war-footing in these unprecedented times.

Data show that Pakistan’s exports in August saw substantial growth to Afghanistan, Turkey, Australia, Indonesia, and Singapore. However, proceeds declined from the United States, United Kingdom, UAE, Bangladesh, China, Italy, Netherlands, Spain and Kenya.

In FY20, exports fell by 6.83pc or $1.57bn to $21.4bn, compared to $22.97bn the previous year.

Meanwhile, imports plunged 20pc in August to $2.968bn, as against $3.710bn over the corresponding month of last year.

During 2MFY20, overall import bill dropped by 12.12pc to $6.508bn, down from $7.406bn over the corresponding months of last year.

The continuous decline in imports is also providing some breathing space for the government to manage external account despite a downward trend in exports.

In 2019-20, the import bill witnessed a steep decline of $10.29bn or 18.78pc to $44.509bn, compared to $54.799bn last year.

The country’s trade deficit also decreased by 20.6pc in August, mainly due to a steep fall in imports and in export proceeds. In absolute terms, the trade gap narrowed to $1.382bn, as compared to $1.740bn over the corresponding month of last year.

In the first two months, trade deficit dipped by 17.58pc to $2.924bn, as against $3.548bn over the last year.

During FY20, it narrowed to $23.099bn, from $31.820bn.