ISLAMABAD    -    The PTI-led federal government has missed the exports target by wide margin during last fiscal year despite depreciating the currency and giving incentives to the exports oriented sectors of the country.

The country’s exports were recorded at $23 billion during the fiscal year 2018-19 as against the government’s target of $27 billion. Adviser to Prime Minister on Commerce Abdul Razak Dawood had promised to increase exports to $27 billion by June this year – a target that the government has missed by $4 billion. The government’s decision of depreciating currency had failed to boost the country’s exports.

The government had also provided cash assistance to major sectors, mainly textile and clothing for increasing the overall exports. Similarly, the government had also announced to reduce the gas and electricity prices for the exports oriented sectors.

However, Pakistan’s exports had reduced by 1 percent to $23 billion in last fiscal year from $23.2 billion of the preceding year. However, the government has reduced the volume of soaring imports by $6 billion. The country’s imports have recorded at $54.8 billion during the year 2018-19 as compared to $60.8 billion of the year 2017-18. The government had controlled the pace of soaring imports during ongoing fiscal year. The imports have decreased by imposing Regulatory Duties (RD) on the imports of furnace oil and other luxury items of food and automobile.

The massive reduction in imports has helped in controlling the trade deficit of the country. Pakistan’s trade deficit has shrunk by 15.33 percent in previous fiscal year. The country’s trade deficit has recorded at $31.8 billion during last fiscal year as compared to $37.6 billion of the corresponding period of the previous year showing decline of 15.33 percent. The reduction in trade deficit would help in controlling current account deficit of the country, which had touched historic $18 billion in fiscal year 2017-18. The reduction in trade deficit is easing the pressure on the country’s foreign exchange reserves. The reserves are under pressure due to massive repayment on previous loans and interest payment.

According to the fresh PBS data, Pakistan’s exports had recorded a negative growth by 8.77 percent and down to $1.72 billion in the month of June 2019 from $1.88 billion of June 2018. Similarly, the imports had recorded decline of 22.8 percent to and reached $4.36 billion in June 2019 from $5.65 billion in the same period of the last year. The trade deficit was recorded at $2.65 billion in June 2019 as against $3.77 billion of June 2018, showing a reduction of 29.8 percent in last one year.

According to the Annual Plan 2019-2020, there is improvement in exports receipts in certain major groups like; textile and petroleum while decline in food, other manufacturing groups and all other items exports offset the positive gains and overall exports declined. Slowdown in economic activities at our certain export destinations has also affected demand side of exports.

On the other hand, the import bill of machinery, textile, transport, food and metal groups declined while agriculture and other chemical and petroleum groups witnessed rise. The import bill of these two groups ballooned because of rise in import of fertilizer and chemicals for agriculture and petroleum crude and LNG under petroleum group. However, the import bill of other major groups witnessed decline, which led towards overall contraction in the import bill.