IMRAN ALI KUNDI / APP

ISLAMABAD

The government is expecting that Pakistan’s exports would recover in July and may surge to around $ 2.0 to $ 2.1 billion. The exports of goods and services dramatically declined in April and May 2020, following the outbreak of the COVID-19 pandemic. However in June exports remained at $1.6 billion which implies that revival of economic activities in trading partners has caused 25 per cent growth in exports. “It is expected that exports will further recover in July and may find themselves within a broad margin around $ 2.0 to $ 2.1 billion,” the ministry of finance noted in Economic Outlook July 2020.

For the current fiscal year (FY 2021), the target of exports is $22.7 billion which is almost $1.9 billion per month on average. Meanwhile, the target imports for FY 2021 is $42.4 billion which is almost $3.5 billion per month on average. It is expected that imports will recover in June and July and may find themselves within a broad margin around $3.5 to $4.0 billion. The monthly profile of the import propensity (share of imports of goods and services in domestic GDP, both measured at current prices), is very volatile. Nevertheless, high (low) levels of interest rates and REER exert deflationary (inflationary) shocks on the economy and affect the propensity to import.

The target of workers’ remittances for FY 2021 is $21.5 billion, which implies $1.8 billion per month on average. For July-20, due to Eid and revival of economic activities, it is expected that workers’ remittances may remain with the range of $1.8 to $2.0 billion. In June-20, there was 51 per cent increase in workers’ remittances compared to those in June-19. Thus, for FY 2020, workers’ remittances remained $ 23.1 billion.

Growth in workers’ remittances helped in reducing Current Account Deficit significantly. COVID-19 outbreak has raised concerns of a substantial fall in remittance flows to the developing countries especially to Pakistan due to recent contraction in Gulf countries. However, the recovery is underway in major trading partner/ remittances destinations and further policy support will encourage people to send remittances to their families. Further the government is making efforts addressing issues related to Pakistani workers working abroad. “With these we expect that Current Account Deficit will be within last year level, however with improvement in Foreign Direct Investment and other Financial inflows, there will be no pressure on foreign reserves and thus stable exchange rate is expected in the next month,” the ministry of finance noted.

USA, China, UK top 3

destinations of Pakistani

exports during FY 2019-20

The United States of America (USA) remained the top export destinations of the Pakistani products during the fiscal year (2019-20), followed by China and United Kingdom (UK). The total exports to the USA during July-June (2019-20) were recorded at $3897.852 million against the exports of $4042.701 million during July-June (2018-19), showing negative growth of 3.58 per cent during the period under review, according to State Bank of Pakistan (SBP).

This was followed by China, wherein Pakistan exported goods worth $1663.672 million against the exports of $1858.878 million last year, showing decrease of 10.50 per cent. UK was the at third top export destination, where Pakistan exported products worth $1637.280 million during fiscal year under review against the exports of $1758.050 million during last year, showing decrease of 6.86 per cent, SBP data revealed. Among other countries, Pakistani exports to United Arab Emirates (UAE) stood at $1585.632 million against $ 1382.792 million during last year, showing increase of 14.66 per cent while the exports to Germany were recorded at $1301.311 million against $1307.459 million last year, the data revealed.

During the fiscal year (2019-20), the exports to Afghanistan were recorded at $888.913 million against $1192.559 million whereas the exports to Holland stood at $981.404 million against $948.911 million. Pakistan’s exports to Spain were recorded at $869.736 million against $929.421 million last year where as the exports to Italy stood at $750.917 million against $805.399 million. Similarly, the exports to Bangladesh during the period under review were recorded at $694.124 million against $744.720 million while the exports to France stood at $422.234 million against $443.532 million. Pakistan’s exports to Singapore were recorded at US $ 178.560 million during the fiscal year compared to $264.831 million last year whereas, the exports to Canada stood at US $ 269.983 million against $285.089 million, to Saudi Arabia $453.847 million against $330.156 million whereas the exports to India stood at $28.644 million during the fiscal year against $311.958 million during last year.