Goods exports jump 11.6 percent in August

ISLAMABAD: Pakistan’s goods exports jumped 11.6 percent year-on-year in August 2022 compared to the same month last fiscal year, while imports contracted 8.26 percent to $6.03 billion from $6.577 billion in Aug 2021, provisional data showed on Thursday.

In July, the exports dropped 5.17 percent; however, the export proceeds bounced back to $2.5 billion in the month under review against $2.24 billion in the same month last year.

On a month-on-month basis, the export proceeds increased by 11 percent. They had exports posted a negative growth of 14.75 percent in August 2020.

In July-August, the total export proceeds stood at $4.75 billion against $4.58 billion in the corresponding period last year, indicating a growth of 3.71 percent.

The trade deficit in August 2022 reduced by 18.5 percent to $3.5 billion from $4.33 billion in the same month a year ago. Last fiscal’s monthly average of remittances inflows was $2.6 billion, with total inflows recorded at $31.237 billion.

Goods exports increased 11 percent from $2.25 billion in July 2022, while imports grew 20.8 percent compared to $4.99 billion in the previous month.

From July through August 2022, the trade deficit shrank 17.1 percent to $6.269 billion against the $7.565 billion the economy racked up a year ago.

Imports during July-August 2022 surged to $11.3 billion and exports clocked in at $4.76 billion. The imports were 132 percent more than exports, which is a real challenge for the policymakers to rein in the runaway trade deficit. This ultimately disturbs the country’s balance of international payments and brings pressure on the rupee.

In the same period last fiscal, imports were at $12.15 billion and exports at $4.59 billion. This depicts a 3.75 percent growth in exports, while a 9.25 percent decline in imports, the statistics office said.

It is pertinent to note that during the last fiscal year 2021/22, the trade deficit stood at a historic high of $48.385 billion, or 55.7 percent more than the $31.1 billion recorded in FY2020-21.

In FY22, imports clocked in at $80.18 billion and exports $31.8 billion. In FY21, the exports were $25.3 billion, while imports at $56.4 billion. Exports increased 25.6 percent and imports 42.2 percent.

Although the country started the new financial year with comparatively low imports and high exports compared to last fiscal’s trade performance, yet heavy flooding may pose a challenge.

The PBS also reported the services trade data for July 2022. Local companies imported more services than their exports.

In July 2022, services exports stood at $530 million and imports at $789.9 million indicating a deficit of $259.9 million. In the previous month of June 2022, exports were recorded at $634.9 million and imports at $1.32 billion with a deficit of $682.1 million.

During the month under review, exports were down by 16.5 percent and imports by 40 percent when compared to the previous month.

Comparing July 2022’s services trade performance with the same month of the last year, exports jumped by eight percent and imports by 1.5 percent.

Last year in July 2021, services exports stood at $491million and imports at $778 million, with a deficit of $287 million. The services trade deficit reduced by 9.5 percent in July 2022 against the corresponding month of last year.

In the last FY22, the services trade deficit was $5.175 billion, up 105.7 percent from $2.516 billion in FY21, as local companies imported more services than they exported.

In FY22, the economy hired foreign companies’ services for $12.14 billion, while it sold services abroad for $6.97 billion. In FY21, the country’s services exports stood at $5.945 billion and imports were recorded at $8.46 billion. This represents an increase of 17.2 percent in services exports and 43.5 percent in imports. According to the All Pakistan Textile Mills Association (APTMA), Pakistan’s textile exports increased by 6 percent in August 2022 to $1.55 billion against $1.46 billion in August 2021.

In July 2022, textile exports increased by only a percent to $1.48 billion from $1.47 billion in the same month a year ago.

In July-Aug 2022, textile exports increased by only three percent to $3.03 billion compared to $2.93 billion in the same period of last fiscal.

“Due to lack of energy supplies, textile export growth was reduced from double-digit to a single digit.” It warned, “if reliable, affordable supplies weren’t made available, this could further contribute to sluggish growth in the ensuing months,” the association said,

In FY22, textiles sector exports increased by over a quarter during FY22 as compared to FY21, achieving the highest-ever exports of $19.35 billion on the back of high international demand.

After the government incentivizing the sector, over the last two years, its exports have substantially increased. In FY21, its exports were $15.4 billion and in FY20, its sale abroad was $12.5 billion.