Total exports slides by 12.11% in 2015-16, imports 2.32%
KARACHI: Despite an effort of the government to enhance exports in 2015-16, the country’s goods export declined by 12.11 per cent to $20.802 billion in (July-June) 2015-16 from $23.667 billion in the same period last year.
The Ministry of Commerce has announced the trade policy after a delay of almost nine months in March 2016 and set a target of $35 billion till 2018, but the analysts or the businessmen claimed the government’s export target would be hard to achieve in such circumstances.
In the recently announced budget for 2016-17, the finance ministry gave some incentives of rebate and Zero-rated Sales Tax to top five important textile sectors to enhance their exports in the coming two years. These five sectors export almost half of the total goods export from Pakistan specially in European Union (EU), America and other countries.
“The exports of the country are in line with the expectations as we were expecting the goods exports of the last fiscal year in between $21-$22 billion,” the analyst said. “The exports are almost $21 billion while the imports have gone down only by 2.32 per cent in last fiscal year. The exports receipts are the major indicator to keep government’s External Account stable. The country had also received above $19.9 billion through the workers’ remittances last year which would cover the current account of the country, the analyst said.
However, the businessmen said that Trade Development Authority of Pakistan (TDAP) did nothing last year except to hold some exhibition in Tajikistan and other Russian states. Punjab faced the worst power and gas shortage in last fiscal year. After a hue and cry of the business communities, the government provided some relief to the industry in last three month of last fiscal year 2015-16. The government announced the import of Liquified Natural Gas (LNG) to fulfill the demand of industrial sector in February 2016.
On Month-on-Month basis, the country’s exports decreased by 9.88 per cent and stood at $1.651billion in June 2016 compared to $1.832 billion in May 2016, Pakistan Bureau of Statistics data revealed on Friday. However, year-on year basis, the exports declined by 8.73 per cent in June 2016 compared to $1.809 billion in June 2015.
Meanwhile, country’s total imports fell by 2.32 percent to $44.765 billion during July-June this year from $45.826 billion in the same period last year.
On Year-on-Year basis, imports increased by 2.27 percent in June 2016. The import recorded at $4.467 billion in June 2016, which was stood at $4.368 billion in June 2015. On month on month basis, the imports of the country increased by 11.45 percent to $4.467 billion in June 2016 compared $4.008 billion in May 2016.
The trade deficit in July-June 2015-16 increased by 8.14 percent to $23.963 billion from $22.159 billion in the same period last year. In June 2016, trade deficit increased by 10.04 per cent on MoM basis due to increasing imports.
Through the budget announcement for 2016-17 five major export oriented sectors were given Zero rated Sales Tax regime to facilitate export-oriented industry and this decision of the government was welcomed by the textile industry and its trade bodies. “there is being hoped that the textile export will increase in 2016-17.
The step would go a long way and help promote the country's exports which are stagnant since long time, a businessman said. The notification is an ample of government's seriousness to put economy back on rails, which would boost the trust of not only local businessmen but would also give a very good message to the foreign investors.
Zero-rated sales tax regime for value-added textile sector would certainly bring down the industrial cost of doing business and Pakistani products would be able to win their due share in the international market. This initiative of the government would encourage businessmen to supplement the government endeavours aimed at economic revival of the country.