ISLAMABAD: Pakistan couldn’t escape the effects of global slowdown triggered first by the COVID pandemic and later exacerbated by the Ukraine war as the country’s exports and imports posted a negative growth during the July-March 2022-23 period, as shown by the Pakistan Economic Survey.
However, the domestic issues – ranging from high policy rate, inflation and rupee depreciation as well as political and economic uncertainty – multiplied the problems for Pakistan where the rising cost of production made it impossible to make the exports competitive in international markets.
It comes at a time when the consumers with reduced purchasing power around the world are less inclined to spend on products like textile – a sector with the lion’s share in Pakistan’s overall exports.
When it comes to imports, foreign reserves shortage meant restrictions were imposed on imports while the industrialists are also not ready to import machinery to expand their businesses.
The Economic Survey released on Thursday says exports declined by 9.9 per cent during the first three quarters of the outgoing fiscal year to $21.0 billion against the level of $23.3 billion in the same period last year. The decline in exports was driven by both declining trend in export volumes and unit values amid the underperformance seen in the textiles and food sectors.
A 3.4pc decline was witnessed during this period in food sector to the level of $3.8 billion during the July-March period when compared with $3.9 billion in last financial year. Reduced basmati produce and thus exports amid shrinking cultivated area are the main reason.
But this trend is starker for the textile which saw a 12.4pc decrease in exports and touched $12.5 billion compared to US $ 14.2 billion during the corresponding period last year.
While countries like Bangladesh and Vietnam seized the opportunity provided by the zero-COVID policy followed by China, Pakistan failed to do the same due to the failure on the part of textile sector to focus on value addition by spending more on research and quality – thus this lack of investment and reinvestment is reflected in our exports data.
