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Pakistan loses $1.6b on low exports

Sep 26, 2018
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Import restrictions not a solution to external sector challenges, says ministry
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The Ministry of Planning on Friday disagreed with the policy of restricting imports to control the yawning current account deficit, emphasising that focus should instead be on exports that got vital support from a surge in global commodity prices.

In its first quarterly economic review report, the planning ministry revealed that in terms of quantity, Pakistan’s exports were going down and the country sustained a loss of $1.6 billion in the July-September quarter of current fiscal year.

Not only that, the surge in global commodity prices also led to a $3 billion increase in exports, which was equal to 42% of total exports during the period, according to the report that carried some high quality analysis.

Had there been no surge in global prices, Pakistan’s exports would have plunged in dollars terms in the first quarter of FY22.

“Quantity exported of cotton cloth went down substantially and only the global price surge saved the day for exports of textiles in dollar terms,” said the report.

It cited Pakistan Bureau of Statistics (PBS) figures, showing that cotton cloth exports went down 75% in quantity terms that led to a potential loss of $1.7 billion.

The revelation should be seen as a huge setback to the claims made by Commerce Adviser Abdul Razak Dawood and the textile lobby - All Pakistan Textile Mills Association (Aptma) - about a massive increase in exports.

Exporters have failed the nation and the government despite getting the benefit of low taxes and cheaper energy prices.

The report underlined that imports surged again to their highest-ever level at $17.5 billion and recorded a 64.3% growth in the first quarter of current fiscal year to cater to needs of growing economic activities in the country.

The report also challenged the policy stance taken by the State Bank of Pakistan (SBP) and the Ministry of Finance to address the issue of current account deficit that had widened to $5.1 billion in first four months of FY22.

The four-month deficit was about 100% more than the annual target of $2.3 billion.

“A broad-based policy thrust is needed to focus on increase in exports rather than curtailing imports,” said the Ministry for Planning and Development.

“The momentum in imports is especially endangering the prospects of macroeconomic stability and the existing momentum in exports along with heightened remittance inflows are partially offsetting the growing trade imbalances and debt servicing burden,” it added.

The report pointed out that Pakistan needed to make $21.8 billion worth of foreign debt-related payments in the current fiscal year, out of which public sector liability was $17.7 billion.

For the next fiscal year, the foreign debt servicing liability was estimated at $17.2 billion, stated the planning ministry.

While citing historical data, the ministry stated that Pakistan’s economy had a strong correlation between increase in economic activity and surge in imports. Global commodity prices and import growth have moved in tandem from January 2000 to September 2021.

The post-pandemic pickup in economic activity has once again fueled import demand and an imperative to preempt any balance of payments crisis in the near term.

It highlighted that the central bank had taken two major policy decisions - enhancing the cash margin requirement for 500-plus items and the market-determined exchange rate policy.

“Real Effective Exchange rate (REER) has historically shown ineffectiveness to curb imports in the past. Import substitution strategy has also failed in the past. Cash margin requirement was used in 2008 as well but was unable to make significant contribution to bridle imports,” said the Ministry of Planning.

The views expressed by the ministry are similar to those of the World Bank that has also discounted import-related restrictions as a reasonable policy to stem a serious balance of payments crisis.

The ministry said that global commodity prices were correlated with import growth primarily because Pakistan’s imports were relatively inelastic and the bulk of import basket consisted of essential items.

Food, consumer goods (mobiles and vehicles) and textile-related imports have touched their highest-ever share while energy imports have their lowest share in the past two decades.

“One lesson can be drawn which is that four-fifths of imports are essentials and could not be avoided.”

During the previous fiscal year, food imports were equal to 13.4% of total imports, other consumer goods 8.7%, intermediary primary goods 3.4%, intermediate manufactured goods 14%, petroleum and other energy-related imports 18%, capital goods and other machinery 10.3% and textile goods 10.4%.

While commenting on the economic outlook of Pakistan, the planning ministry said that the economic stimulus package announced by the government had helped in the revival of manufacturing sector. However, the pace of the recovery is still hindered by supply chain glitches at the local and global level.

 

Arsalan345

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No problem. they will ask for loan from Saudi, UAE. This is what we do but this will not continue forever. Our rule is simple. Fill your pockets with dollar, beg again, fill pockets, beg again.
 

Patriot forever

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I have never seen a more illiterate journalist.

Cotton cloth is the least value added product in our exports.

Other countries used to import cotton cloth from Pakistan and turn it into value added products earning many times more.

It's called value addition. Our value added products have gone up significantly both in quantity and in dollar terms.

Besides food includes tea, cooking oil aswell.

He is twisting the words of planning commission, we are not exporting higher quantities of many products which we normally exported due to increased local consumption especially vegetables and fruits.

He tried to spin this by talking about cotton cloth.

The irony is he is trying to prove that increase in exports is due to price increase but increase in imports have nothing to do with price increase which have gone up much much more than clothes 😂
 
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Vanamali

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Time has come for Pakistan to enter a no war/aggression for next 50 yrs agreement with support and guarantees of P5s and cut the size of Defense (maintain minimum defense force like Japan) and concentrate on trade and economic development. 220 crores of Pakistanis should be priority over Kashmir (morals suits only for ppl whose tummy is filled)..
 

JawadKKhan

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Time has come for Pakistan to enter a no war/aggression for next 50 yrs agreement with support and guarantees of P5s and cut the size of Defense (maintain minimum defense force like Japan) and concentrate on trade and economic development. 220 crores of Pakistanis should be priority over Kashmir (morals suits only for ppl whose tummy is filled)..
LMAO!, who is saying this ? An indian ? India is at 106/116 at hunger index. Its world's largest population of under poverty line people. Its a slum capital of world. Pakistanis by far enjoy more better life style then indians. So, its over 1 billion indians who needs priorities over buying weapons from world wide. India has money but its so sad that they do not spend on their population.

On, the other note, Pakistan will always procuring deadly weapons and our priority is clear. Its security / defense first.
 

Vanamali

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LMAO!, who is saying this ? An indian ? India is at 106/116 at hunger index. Its world's largest population of under poverty line people. Its a slum capital of world. Pakistanis by far enjoy more better life style then indians. So, its over 1 billion indians who needs priorities over buying weapons from world wide. India has money but its so sad that they do not spend on their population.

On, the other note, Pakistan will always procuring deadly weapons and our priority is clear. Its security / defense first.
boss.. I am suggesting the agreement for benefit of India.. Pakistan should think about its future whether you do or not is your right as you enjoy the result of it..
 

JawadKKhan

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boss.. I am suggesting the agreement for benefit of India.. Pakistan should think about its future whether you do or not is your right as you enjoy the result of it..
We both know, its impossible. it will only happen when india reduces its build up. The state of indian population is far from ideal, The poverty is at massive scale, yet it keeps spending billions or trillion on military. Any such agreement to lower defense buildup can only be imaginable if both sides agrees to it.

I see, no sign of such bi-lateral agreement going to happen in foreseeable future at all.
 

arjunk

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Time has come for Pakistan to enter a no war/aggression for next 50 yrs agreement with support and guarantees of P5s and cut the size of Defense (maintain minimum defense force like Japan) and concentrate on trade and economic development. 220 crores of Pakistanis should be priority over Kashmir (morals suits only for ppl whose tummy is filled)..

Yes, the country which almost imploded from war not too long ago should cut down defence spending just when a second cold war is starting.
 

Vanamali

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We both know, its impossible. it will only happen when india reduces its build up. The state of indian population is far from ideal, The poverty is at massive scale, yet it keeps spending billions or trillion on military. Any such agreement to lower defense buildup can only be imaginable if both sides agrees to it.

I see, no sign of such bi-lateral agreement going to happen in foreseeable future at all.
What is the concrete step from your side before you expect India to do.. In any agreement, what is that you offer to India.
Stop poking in Kashmir, 80% of problems will vanish. To contain India, you brought in dragon into room, now you have to feed it whether you like or not/ whether you have or not.
Pakistan always thought from Geo Strategical location point of view not from Geo Strategical Economic view. CPEC would have been a Golden Goose if it was handled properly with keeping Pakistan economic development as the highest priority. You would have been center of economic boom in Asia if you had chosen right path. Pakistan is more interested in India then itself.

Can anyone quote one economic reforms brought in by Pakistan in last decade which improves Pakistan economics. Off-late your Military Leadership sound sensible than egoistic Khan. He is Cambridge guy then what is the use for Pakistan.. fluent english / play boy stature what is the use when as a PM he cannot see beyond his nose. Tell me one diplomatic victory of your play boy.. He is the main reason for downfall of Pak Our chaiwalla is far better in many ways with all his negatives. Whenever i see economic woes of common Pakistan, i will be literally in to tears.

For highlighted part: agreed, we as Indians are trying to do our best to make our country in better country to live. As an individual, I will only make electronic payment, pay all taxes, buying only Indian items even if they are little costly, avoiding imported stuff when local alternative is available, I will walk to local grocery whenever possible so as to spend less on imported fuel.

Regarding spending on defense, can you say that we are cutting corners of welfare expenditure or education expenditure to feed Military. We are on path of self sufficient slowly and surely, bringing defense Industries in to India which will help us economically creating jobs, increasing value added exports and becoming strong militarily.

Both sides agreement is possible only if Khan can keep his mouth shut in public.. His motor mouth talk never benefited Pakistan. His tounge is more dangerous than terrorist threat to Pakistan. He has to represent Pak first not Taliban or Kashmir or Islam.
 

Bilal.

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I have never seen a more illiterate journalist.

Cotton cloth is the least value added product in our exports.

Other countries used to import cotton cloth from Pakistan and turn it into value added products earning many times more.

It's called value addition. Our value added products have gone up significantly both in quantity and in dollar terms.

Besides food includes tea, cooking oil aswell.

He is twisting the words of planning commission, we are not exporting higher quantities of many products which we normally exported due to increased local consumption especially vegetables and fruits.

He tried to spin this by talking about cotton cloth.

The irony is he is trying to prove that increase in exports is due to price increase but increase in imports have nothing to do with price increase which have gone up much much more than clothes 😂
It’s Shahbaz Rana. He fabricates negative news one there isn’t one.
 

JawadKKhan

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What is the concrete step from your side before you expect India to do.. In any agreement, what is that you offer to India.
Stop poking in Kashmir, 80% of problems will vanish. To contain India, you brought in dragon into room, now you have to feed it whether you like or not/ whether you have or not.
Pakistan always thought from Geo Strategical location point of view not from Geo Strategical Economic view. CPEC would have been a Golden Goose if it was handled properly with keeping Pakistan economic development as the highest priority. You would have been center of economic boom in Asia if you had chosen right path. Pakistan is more interested in India then itself.

Can anyone quote one economic reforms brought in by Pakistan in last decade which improves Pakistan economics. Off-late your Military Leadership sound sensible than egoistic Khan. He is Cambridge guy then what is the use for Pakistan.. fluent english / play boy stature what is the use when as a PM he cannot see beyond his nose. Tell me one diplomatic victory of your play boy.. He is the main reason for downfall of Pak Our chaiwalla is far better in many ways with all his negatives. Whenever i see economic woes of common Pakistan, i will be literally in to tears.

For highlighted part: agreed, we as Indians are trying to do our best to make our country in better country to live. As an individual, I will only make electronic payment, pay all taxes, buying only Indian items even if they are little costly, avoiding imported stuff when local alternative is available, I will walk to local grocery whenever possible so as to spend less on imported fuel.

Regarding spending on defense, can you say that we are cutting corners of welfare expenditure or education expenditure to feed Military. We are on path of self sufficient slowly and surely, bringing defense Industries in to India which will help us economically creating jobs, increasing value added exports and becoming strong militarily.

Both sides agreement is possible only if Khan can keep his mouth shut in public.. His motor mouth talk never benefited Pakistan. His tounge is more dangerous than terrorist threat to Pakistan. He has to represent Pak first not Taliban or Kashmir or Islam.

Well, I disagree. First of all, you have asked what Pak has done, so we are expecting india to lower its buildup. I never expect india to lower its buildup, I see india's priority is not improving 106/116 hunger index or massive scale of under poverty line population.

Staying away from Kashmir is IMPOSSIBLE!. When whole kashmir shouts LOUD n CLEAR Pakistan Zindabad!. We see the protests, the indian military brutalities, the murders of innocents in the name of terror facilitators etc. You cut the communication, internet of whole community, the entire valley and expect us Or mr.Khan to keep quite. Its not gonna happen. Its probably the only thing most pakistanis like about IK is to calling out india for its brutalities.

Now, coming to economy of Pak.. Well dear, you don't have to worry too much on it. In today's age economies can rise and fall too quickly. India till 1990's also used to go to IMF, its status wasn't too good. Then later 20 years, Pak faced war on terror. That means no investments. Although Pak also had cheap labor but india benefitted from all foreign investments. India grabbed the opportunity and fully funded and managed the TTP. I can go at length on this. But I'll just quote few examples:

1) Pak AeW&C aircraft was specifically targetted at KAMRA by terrorists. (The aircrafts are specifically to monitor IAF, the terrorists do not have an airforce they did this one-way trip and suicide mission only to benefit its funders)
2) Pak ASW aircraft was targetted. Again TTP did not had submarines, why they targetting assets only specific to india ??
3) Srilankan team was targetted: Mission was absolutely clear to move any future mega events from Pakistan and shift them to india. Every target was specifically helping india directly.
The list goes on..

So, its india our existential enemy is no angel as you are pretending. AFTER all this, saying us to lower our defense budgets is as hilarious as abhinandan shot down an F-16 or earth is Flat!

We never see india doing any position effort at all. Its full focused towards pakistan. Either trying to blacklist Pak at FATF or anything else.

However, times have changed drastically, When Modi Came Pakistan was facing 2.5 front war. one with india, other at Afghanistan border and one internally the indian funded terrorism. Now Pak is facing 1 front that's towards india.. But thanks to Modi's disastrous policies india is trapped in endless 2.5 front war. Pak, China and completely alienated kashmiri population.

So before you put out suggestions for Pak, its time you focus on what evil india has been spreading around.
 

JawadKKhan

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Impose heavy duties on non-essential / luxury items to reduce import bill.
Yep, In addition, even can ban some non-essential / luxury items as rich can anyway afford it and will keep adding to import bill.

In addition, the expenditure can easily be cut down massively if state has the will to do so.

I think it is time, tax payers should not be feeding hundreds of thousands of govt employees from the organizations which are on continuous loss (PIA, steel mills, radio pak, railways or others)..

Ideally, these organisations needs to be privatized OR given 6 month deadline to become self-sufficient after that no funds from govt will be transferred. These organizations may start to lay off muft khoras themselves and put themselves in order. But every time something like this is about to happen, the judiciary steps in. Specific legislation should be done in this regard. Concept of "sarkari - pakki naukri" must be eliminated. One must be fired if there is no performance.
Just imagine Pak railway has about 75000 employees, their salaries, medical, pension, other addons all by Tax-payer money is a kill bill. Even the strongest economies cannot afford such blunders. The service based organizations needs to be in profit when there's even no competition. If its in massive loss ( over Rs 50 billion loss every year ) that means organization has corruption, has ghost employees, number of permanent employees far exceed then what was required) .. Same goes for all other government orgs / depts.

Jiyeh bhutto laid the foundation of corruption in the country, nationalized all top organisations and employed all Jiyalas in those. Political workers doing party work kept getting salaries, pensions and also thankful to party for the permanent employment.
 

Vanamali

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Well, I disagree. First of all, you have asked what Pak has done, so we are expecting india to lower its buildup. I never expect india to lower its buildup, I see india's priority is not improving 106/116 hunger index or massive scale of under poverty line population.

Staying away from Kashmir is IMPOSSIBLE!. When whole kashmir shouts LOUD n CLEAR Pakistan Zindabad!. We see the protests, the indian military brutalities, the murders of innocents in the name of terror facilitators etc. You cut the communication, internet of whole community, the entire valley and expect us Or mr.Khan to keep quite. Its not gonna happen. Its probably the only thing most pakistanis like about IK is to calling out india for its brutalities.

Now, coming to economy of Pak.. Well dear, you don't have to worry too much on it. In today's age economies can rise and fall too quickly. India till 1990's also used to go to IMF, its status wasn't too good. Then later 20 years, Pak faced war on terror. That means no investments. Although Pak also had cheap labor but india benefitted from all foreign investments. India grabbed the opportunity and fully funded and managed the TTP. I can go at length on this. But I'll just quote few examples:

1) Pak AeW&C aircraft was specifically targetted at KAMRA by terrorists. (The aircrafts are specifically to monitor IAF, the terrorists do not have an airforce they did this one-way trip and suicide mission only to benefit its funders)
2) Pak ASW aircraft was targetted. Again TTP did not had submarines, why they targetting assets only specific to india ??
3) Srilankan team was targetted: Mission was absolutely clear to move any future mega events from Pakistan and shift them to india. Every target was specifically helping india directly.
The list goes on..

So, its india our existential enemy is no angel as you are pretending. AFTER all this, saying us to lower our defense budgets is as hilarious as abhinandan shot down an F-16 or earth is Flat!

We never see india doing any position effort at all. Its full focused towards pakistan. Either trying to blacklist Pak at FATF or anything else.

However, times have changed drastically, When Modi Came Pakistan was facing 2.5 front war. one with india, other at Afghanistan border and one internally the indian funded terrorism. Now Pak is facing 1 front that's towards india.. But thanks to Modi's disastrous policies india is trapped in endless 2.5 front war. Pak, China and completely alienated kashmiri population.

So before you put out suggestions for Pak, its time you focus on what evil india has been spreading around.

Regarding 106/116 hunger index.. Indian Govt is working on it and allocating necessary funding to fight poverty and hunger like Monetary measures/Fiscal measures/ Public distribution system/administered price mechanism etc etc along with rooting out corruption by direct transfer benefit and increasing digital transactions. It will take some time to see the fruits but definitely we are not leaving any one behind. Indian are know for long and lone grinding.. we will surely achieve the zero hungry target.

"Staying away from Kashmir is Impossible" when you dont have money to run Pakistan as said by PB(Playboy) Khan.. you will have only Kashmir left after girivfyig all public assets. PB Khan is known as U Turn master.. one day will come when he will take U turn on Kashmir also. Just think when petrol becomes PKR 170 from current PKR 145 down the line in 6 months, PKR 14 per unit of electricity to PKR 20 in 2023, ppl of Pak will not think of even Pakistan leave about Kashmir. Pakistan has started this war and definitely it has to end.. and it will end and India will ensure that it will cost very badly to Pakistan.. current generation of war is not with nukes its with economics, disinformation and diplomacy.. India will never allow Pakistan to go for a full blown war... we keep it simmering and ensure that it is below blowing point but definitely imposing compounding cost of starting war with India. Already you are neck deep in debts.. just another two years Pakistan will be trying to keep its nose above water... With current economic conditions Pakistan will have fight civil wars in near future and fight freedom movements like Sindhudesh/ Baluchistan and Taliban entering the scene FATA might also start, who knows.. other side your Iron brother will be asking you pay back his return or else he will take away your girvified assets.. Pakistan Future is glowing

Indian economy did not grow a bubble growth, it is result of structural reforms to accelerate and maintain the growth.. For young nations like Pak and Ind 30 yrs is almost 40% of their age. Indian economy is resilient enough to bounce back even if it is hit by economic downfall. Food security is achieved and Industrial self sustainability is now taken care.. We are on right track and we are happy for visionary leadership of current and past. You can aspire for leadership in ummah and chumma..

Regarding Terrorist destroying your equipment which are India specific.. Terrorist dont use logic.. they want to make point that they can duck you anywhere and at any time.. if you think that it is done/supported by India.. wtf your numero uno agency is doing.. ask it to prove and pull India to security council else it is just plain incompetency of your agency.. have you ever seen heads rolling in you security establishment for its failure.. When you have incompetent agencies it is bound to happen.. dont cry.. If Pak govt thinks that it is done by India.. pls cross the boarder and destroy the source of terrorism. for what are you maintaining military with USD 8.8 billion.. is it for doing business of running marriage halls and other civilian activities...

Regarding Modi's rule.. Time will tell... Pakistan has started asking US to help in normalizing ties with India.. Ensured China is loosing economically (estimated INR 50k during Diwali season alone)..Alienated Pakistan in its Ummah world. brothers like Malaysia and turkey are slowly and surely abandoning Pakistan like used tissue paper...

India needs to do nothing for normalizing relation with Pakistan.. It is Pakistan leadership, which has to keep its loud mouth shut and work silently for its development. half of your problems will go away by keeping away unwanted interview by your PB Immi and keeping religious fringe elements in control.. Just to appease TLP you took panga with France which is a de-facto leader of EU, which is your major export destination..

All the best Pakistan.. we will see how our destine would be, after 2 to 3 decades..
 

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