Exports climb to highest level in July

Rupee depreciation, opening of economies in West helped improve exports


Usman Hanif August 03, 2021

KARACHI:

Pakistan posted the highest-ever exports for the month of July as shipments reached $2.35 billion, up 17.3%.

Taking to his official Twitter handle, Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood announced, “During the first month of financial year 2021-22, our exports grew at 17.3% to $2.35 billion as compared to $2 billion in July 2020.”

“These are the highest-ever exports for the month of July,” he added.

The recent rupee depreciation against the US dollar and opening of economies in the West helped improve exports in July 2021, said Topline Securities’ economist Atif Zafar while talking to The Express Tribune.

Exporters are also increasing their capacity on the back of financing provided through the Temporary Economic Refinance Facility (TERF) of the State Bank of Pakistan (SBP).

“There is no doubt that the business and industrial community of the country is striving to make up for the loss caused by the monumental difficulties since the start of the pandemic,” said Karachi Chamber of Commerce and Industry (KCCI) President M Shariq Vohra in comments to The Express Tribune.

He said that exports of $2.35 billion in a single month was a good achievement and exporters as well as the government deserved appreciation for navigating through the Covid-19 waves and unprecedented challenges that emerged in its wake.

Endorsing his views, AHL Limited Head of Research Tahir Abbas said, “Double-digit growth in exports is attributable to the revival of economic activity and surge in global demand. A shift in export orders from India and Bangladesh also helped Pakistan.”

Read More: Pakistan sees 'unprecedented' growth in exports during last 10 months

He added that a significant expansion in the manufacturing sector on the back of lower financing rates and government support had encouraged the export growth.

Exports of $2.35 billion were not only over 17% higher than July 2020 but were also 24% higher than the pre-pandemic exports of $1.89 billion in July 2019, which was admirable, Vohra pointed out, adding “however, the country is not out of the woods yet.”

One reason why Pakistan had experienced the growth in exports was that several other countries had not been as successful as Pakistan in recovering from the pandemic, Vohra said.

“Hence, the government must ensure a policy environment that allows the business and industrial community to be able to compete with other countries as the global supply chain normalises,” he suggested.

“Otherwise, Pakistan may be at risk of losing its export growth,” he said, adding that it should also be noted that other countries had started rebounding as well, especially India. “Country’s exports, however, are still stagnant,” remarked Pakistan Businesses Forum Vice President Ahmad Jawad.

“It is just an increase of $0.35 billion in July; if we accumulate the average increase for the entire fiscal year, then $4.2 billion will be added compared to the last fiscal year, which I think is not an impressive figure despite massive depreciation of the rupee.”

He emphasised that economic managers must go for some out-of-the-box solutions to increase exports substantially so that they could at least cross $30 billion by the end of June 2022.

“There is a need to focus on non-traditional products as relying only on the textile sector is not a sound strategy, because textile millers also need capital to achieve the target,” he added.

Auto sector expert Mashood Ali Khan added that the engineering sector had a lot of export potential but unfortunately its share in exports was the bare minimum.

“It can grow if the government stabilises the exchange rate,” he suggested. “To explore new markets for engineering goods along with export coaching, programmes should be started with support of the government and trade bodies.”

“I urge our exporters to move at full speed ahead to make 2021-22 another record-breaking year for our exports,” Dawood said.

Published in The Express Tribune, August 3rd, 2021.

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