ISLAMABAD: The country’s trade deficit dipped by 33.04 per cent in the first five months of current fiscal year from a year ago, data released by the Pakistan Bureau of Statistics (PBS) showed on Wednesday.

The decline is mainly due to a double-digit fall in imports along with a nominal increase in export proceeds. Moreover, the government’s corrective measures to slow down imports in order to reduce pressures on foreign exchange reserves and slump in overall demand.

In absolute terms, the trade gap narrowed to $9.66 billion in July-November from $14.43bn over the corresponding months last year. On a monthly basis, the deficit fell by 29.65pc to $1.92bn in November from $2.74bn over the corresponding month last year.

Ministry of Commerce estimates the annual trade deficit may decrease by $12bn to $19bn in the ongoing fiscal year from $31bn during the last fiscal year.

Data showed imports in the first five months of current fiscal year clocked in at $19.21bn, down 18.41pc from $23.54bn over the corresponding period last year. The decline in value of imported goods in November was 13.99pc to $3.94bn as against $4.58bn over the corresponding month last year.

Imports fell by 18pc while exports grew by less than 5pc in July-November

Contrary to this, exports grew by 4.79pc to $9.54bn in July-November, against $9.10bn during the same period last year. The numbers are discouraging, as exports, which should have grown over the last few months owing to multiple currency depreciation, have failed to pick up.

Although, in quantitative terms, the exports have increased slightly over the last few months but the overall slowdown in the global markets have led to lacklustre increase in the country’s exports.

On a month-on-month basis, exports in November were up 9.35pc to $2.01bn from $1.83bn over the corresponding month last year.

The government projects exports during the ongoing fiscal year to reach $26.187bn, up from $24.656bn in FY19.

In the Budget 2019-20, the government reduced cost of raw materials and semi-finished products used in exportable products by exempting them from all customs duties. Government also promised to provide sales tax refund to exports sectors.

Meanwhile, a delegation of All Pakistan Textile Mills Association met with Adviser to PM on Commerce Razak Dawood. The meeting was informed that government has already released Rs17.6bn in various drawback schemes pertaining to textiles value chain.

Dawood told the delegation that a meeting will be held with the PM early next week on the issue of quarterly charges of electricity for its early resolution.

He said the government is cognisant of the issues faced by the industry and appreciated that the Federal Board of Revenue has is cooperating with exporters to simplify form-H of SRO918. He asked the textile value chain to fully cooperate with the commerce ministry for formulation of Third Textiles Policy to address long standing issues of the textile value chain and urged that the small and medium enterprises should be given the priority.

The adviser also said that out-of-box approach may be considered for various taxes imposed by federal and provincial organisations and also that credit availability and technology upgradation should be the focus of the policy.

Commerce Secretary Ahmed Nawaz Sukhera also said the ministry would soon issue the necessary memorandum to give special status of export-oriented sectors to textile, leather, carpet, sports and surgical goods. This would resolve all important issues of reduced regasified liquefied natural gas and electricity rates for these sectors, he said.

Published in Dawn, December 12th, 2019