ISLAMABAD: The increasing exports since June 2017 continued its trend during February 2018 by achieving the highest monthly growth in the fiscal year by posting 16% growth in dollar terms and 22% in rupee terms compared to the exports in February 2017.
The current year’s export performance has already contributed additional forex inflows of around USD1.5billion during the first eight months and is expected to reach the figure of additional USD2.5billion during 2017-18. This increase in economic activity in external sector reflects an increase of 0.8% of GDP. This means additional around Rs280billion of income to trade, industry, agricultural sectors and the resultant additional employment.
These results have been achieved due to export-friendly policies and incentives of the government and the renewed efforts towards seeking better market access by the ministry of commerce. The positive trend in the international demand and exchange rate correction is also expected to help sustain this rising trend in the coming months.
The imports have also responded to the steps taken to check the surge in consumer goods inflows since past few years. The imposition of Regulatory Duties on 355 non-essential consumer items by ECC on the proposal by the Ministry of Commerce resulted in reduction in the imports of these goods by 16% while FBR revenue registered an increase. However since the large chunk of imports comprise of essential goods such as fuel and edible oil, which have been affected by the rising trend since July 2017, the impact of the reduced imports of non-essentials is being offset.
The imports of machinery and raw materials, essential for economic growth, also contributed to the gap in the balance of trade. However despite all these pressures, the increase in imports has been only 9.7% during February 2018 compared to February 2017 bringing down the trade deficit by 21% from USD3636m in January 2018 to USD-2895m in February 2018.
