Pakistan records trade surplus with Italy
PHOTO: REUTERS
Despite the Covid-19-fuelled lockdown and supply chain disruption, Pakistan has fared quite well by registering a visible growth in the Italian market in FY20, said Ambassador of Pakistan to Italy Jauhar Saleem.
Speaking to the Pakistani and Italian media, Saleem said Italy was the eighth largest economy of the world with gross domestic product (GDP) of $2 trillion. It is the third largest economy in the European Union (EU) after Germany and France and the ninth top export destination for Pakistan as it hosts the largest Pakistani diaspora in the EU.
Italy is facing tough times due to the widespread impact of the coronavirus pandemic on its economy and the International Monetary Fund (IMF) has projected a 9-11% contraction in the Italian economy whereas the Italian central bank is anticipating a decline of 9-13% in its GDP this year.
The ambassador pointed out that in FY19 Pakistan had a trade deficit of $164 million with Italy. However, in fiscal year 2019-20, despite the coronavirus outbreak and lockdown in the country, Pakistan managed to record a trade surplus of $210 million.
“So, the balance of trade is in Pakistan’s favour now. In FY20, Pakistan’s exports to Italy were $731 million and imports stood at $521 million.”
Pakistan mainly exported textile, leather, rice and ethanol to Italy. “Pakistan is a market leader in rice and it holds 38% share in the Italian market as the country exports rice worth $62 million,” the envoy added.
Thailand has a share of 12% with $19 million worth of export to the Italian market whereas India ranks at number three with a 10% share and $17 million worth of exports. Saleem also shared the strategy to promote Pakistani goods in the Italian market.
Talking about Italian investment in Pakistan during 2020, the ambassador said it had increased by 45% compared to the previous year. The investment jumped to $56.4 million in FY20.
Foreign direct investment from Italy was mostly concentrated in energy, pharma, chemical and IT sectors. A major investment went to the energy sector.
“Italy has planned to invest in renewable energy in Pakistan. Pakistan’s embassy in Rome is facilitating these new investment projects.”
The ambassador said Italy had become the largest contributor from the EU to home remittances to Pakistan. In FY20, the remittances grew 29%, which was far higher than the growth in overall remittances.
The envoy revealed that the embassy had undertaken a number of initiatives so that Pakistani labour force could stay in Italy even during the lockdown instead of returning back to their home country.
“This strategy has delivered and with the improving market conditions, Pakistanis are back to work and worker remittances have registered 77% growth in June 2020.”
Responding to a question, Saleem said the Italian government had decided to temporarily regularise the migrants working in the agriculture sector and as domestic helpers to fill the gap in key jobs, and allow health coverage to the workers.
Pakistan’s undocumented workers are among the main beneficiaries of this scheme.
The ambassador stressed that Pakistan was enhancing areas of cooperation with Italy. Currently, Italy is providing technical assistance in textile, leather and marble sectors. Pakistan is working to expand it to dairy and livestock, olives and olive products, plastics, processed food and construction sector.