ISLAMABAD       -         After failing to enhance the country’s exports despite depreciating the currency, the government has now blamed USA and China trade war and recent border tension with India for slower growth in exports.

The country’s exports are not showing healthy growth despite currency was depreciated and government had given several other incentives to exporters.

Pakistan’s exports of goods had reduced by 3.96 percent in December 2019 on annual basis.

Exports were recorded at $1.99 billion in December, down 3.96 percent over $2.07 billion in corresponding month last year.

According to Pakistan Bureau of Statistics, exports had increased by 3.17 percent to $11.53 billion in six months (July to December) period of the current fiscal year , as against $11.18 billion in same half last year.

The government has listed several reasons for the decline in exports that included USA and China trade war. Trade frictions between USA and

China have put a drag on the world trade. In addition, there has been an economic slowdown in our main markets China, EU and USA.

Meanwhile, the recent border tension with India has further affected export growth.

Price suppression for textile exports: The garment exporters across the world are facing challenges in the EU, as the bloc’s quantum imports of textile and apparel items has slowed down dramatically from last year 2017-18.

China and India have borne the brunt of this slowdown. Pakistan, which, along with Bangladesh and Cambodia, enjoys zero-duty access to the bloc, managed to increase its apparel shipments to the EU during the period.

However, Pakistan and Cambodia were also not completely immune from the slowdown in demand from the EU, as their quantum of textile and apparel exports to the bloc grew at a much lower rate this year than last year.

Apart from the international issues, the internal economic conditions are also creating uncertainty for the business community.

The previous year witnessed a decline in the GDP growth. According to the Ministry of Commerce, the uncertain geopolitical conditions and fiscal challenges will continue to halt positive impact of the policy measures, resulting in the sluggish growth.

Other reasons for the sluggish growth in exports are the exchange rate remained volatile during six months of previous financial year, which kept exporters cautious for future trading. The impact of exports contracts established at a lower price is usually visible with a lag of six months.

The simultaneous devaluation of Euro and Pound Sterling subdued the impact of PKR devaluation.

Meanwhile, the high tariff on imported raw material has increased the cost of production thus making it difficult for the Pakistani products to compete in the international market.

High inflation rate, high energy cost, sales tax refund issues and resultant increase in the case of doing business have impacted the growth of exports.