Exports show biggest growth in history

For first time in 63 years, Pakistan’s exports grow by 42 per cent.

ISLAMABAD:

For the first time in 63 years, Pakistan’s exports grew by 42 per cent in February over the corresponding month of the previous year, as the country continued to reap benefits of rising commodity prices in the world market.

In February, goods worth $2.2 billion were exported, which were $639 million more than the exports in the corresponding month of last year, posting a record growth of 42.1 per cent, the Federal Bureau of Statistics reported on Thursday.

During the same month, imports stood at $3.05 billion, which were $548 million more than the imports in February 2010, showing a growth of 21.9 per cent. In February, the trade deficit – the gap between exports and imports - shrank by 9.3 per cent and remained at only $895 million.

“Despite a deteriorating security situation and flood damages to crops, the continuous $2 billion-plus exports for the last three months were a remarkable achievement for exporters,” said Secretary Commerce Zafar Mahmood. Since December, the country has been earning over $2 billion per month on account of exports.

However, the secretary said that to a large extent the healthy exports were due to an increase in commodity prices in the international market. He said exports of non-traditional items also rose. The high exports came in the wake of an increase in prices of raw cotton, yarn and fabrics in the international market.

Overall in eight months (July to February), the trade deficit rose 7.9 per cent to $10.3 billion compared to the same period of the last financial year. However, the gap is still much below than initial estimates. The government had estimated trade deficit at $18 billion and the figure has been revised downwards to $13 billion, according to the commerce ministry.

From July through February, exports to the rest of the world rose 24.7 per cent or $3 billion to $15.4 billion against exports in the corresponding period of last year. Imports during the period stood at $25.6 billion, showing a growth of 17.3 per cent over last year. In absolute terms, imports increased $3.8 billion during the period.

Finance Minister Dr Abdul Hafeez Shaikh said the other day that exports would touch $24 billion by the end of the fiscal year, which would be around $3 billion more than initial estimates.

The unexpected growth in exports has not only eased the pressure on the external front but also put Islamabad in a comfortable position despite a suspension of the International Monetary Fund’s bailout programme, meant for paying international trade bills. The country has over $17 billion in foreign exchange reserves.

As compared to January, both exports and imports registered a negative growth in February. Exports dipped 7.4 per cent or $171 million to $2.2 billion because in January the country had made record exports worth $2.4 billion. Imports in February decreased 11.4 per cent from January. The trade gap in February over January shrank by 19.7 per cent.

Published in The Express Tribune, March 11^th, 2011.