Exports rise to record high of $25.3b
The rise in exports came due to early reopening of industries in Pakistan as the country lifted the lockdown in July 2020. PHO-TO: REUTERS
Pakistan achieved the highest-ever export of goods valuing at $25.3 billion in fiscal year 2020-21.
A statement of the Ministry of Commerce, released on Thursday, said that exports registered an increase of 18% on a year-on-year basis.
In a series of tweets, Adviser to Prime Minister on Commerce Abdul Razak Dawood boasted that export of goods in June 2021 stood at $2.7 billion, which was the highest monthly figure for the country.
“Export value of services for the full fiscal year is projected at $5.9 billion,” he said. “Hence, the cumulative export of goods and services during FY21 is likely to cross $31 billion.”
He praised exporters for achieving the feat despite the difficulties at home and in export markets in the face of Covid-19 pandemic.
It was not an easy task as many countries went into lockdown, which severely impacted business activities all over the world, he said. The PM aide cherished that Pakistani exporters not only survived the crisis, but also enhanced foreign shipments from many sectors.
“Major rationalisation in the textile value chain, iron and steel raw material for all kinds of flat products, pharmaceutical raw material and machinery and equipment in the budget for fiscal year 2021-22 will further enhance exports,” said Dawood.
“With current measures, exports are expected to grow by 5% in the next two years.”
Tariff rationalisation efforts in the last 2.5 years had decreased the weighted average tariff of Pakistan from 9.07% in 2018-19 to 7.07% in 2021-22 and “now the levies are at par with regional competitors,” he said.
According to the adviser, the reduction in weighted average tariff has reduced the cost of manufacturing, generated employment, attracted new investment and enhanced consumer welfare. “Tariff reforms will continue in the coming years,” he emphasised.
The government has planned to study, analyse and reform the tariff structure in agriculture, transport and logistics sectors next year, he revealed.
In comments to The Express Tribune, Arif Habib Limited (AHL) Head of Research Tahir Abbas acknowledged that export of goods during fiscal year 2020-21 soared to $25.3 billion mainly on the back of growth in the textile sector.
“Textile exports grew 10% during the first 11 months of fiscal year 2020-21 and the sector led the rise in overall exports,” he said. “Moreover, we expect the growth momentum to continue in the coming months owing to an upbeat textile policy coupled with other growth measures announced by the government.”
Topline Securities analyst Atif Zafar said that the rise in exports came due to early reopening of industries in Pakistan as the country lifted the lockdown in July 2020. He pointed out that businesses in a few regional countries were still coping with Covid-related restrictions.
“Pakistan’s exports are marginally up by 1% compared to the previous all-time high of $25.2 billion recorded in FY14,” he said. “There is a huge potential for further improving export of goods.”
Pakistan Businesses Forum Vice President Ahmad Jawad said that while exports hit an all-time high in the just-ended fiscal year, they were still below the true potential.
He called it a meagre increase while keeping in view the massive depreciation of the rupee and uninterrupted power supply to industries for most part of the year.
He projected a minimum $5 billion increase in exports in fiscal year 2021-22.
“In 2013-14, the country achieved exports of $25.1 billion, but at that time the rupee was trading at Rs106 against the dollar,” he said.
Published in The Express Tribune, July 2nd, 2021.
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