• Tuesday, June 25, 2019

Pakistan’s overall exports likely to reach $27 billion

Discussion in 'Pakistan Economy' started by Introvert, Feb 10, 2019.

  1. Introvert

    Introvert FULL MEMBER

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    The business community is optimistic about the country’s overall exports and expects it will reach $27 billion during the current fiscal year.

    Speaking at the inaugural ceremony of the International Maritime Seaboard Exhibition at the Federation House, United Business Group Patron S M Muneer said this is likely because of the reforms introduced by the government, which provided the export-oriented industry much-needed space.

    The event, organised by the E-commerce Gateway, is scheduled to start from March 5, 2019.

    To recall, Finance Minister Asad Umar unveiled a package of measures to boost exports and investment last month. Measures include enhanced ease of doing business, lower taxes for small and medium-sized businesses and cutting taxes on imports of industrial raw materials.

    Talking about maritime industry, Muneer said that Pakistan was only earning foreign exchange worth $500 million from its maritime sector, adding that if the business community was facilitated, this number could increase to $2 billion, as the businessmen would direct their resources towards profitable avenues.

    FPCCI President Daroo Khan said that the chamber would support the government in its endeavour to strengthen economy and urged to reactivate Marine Investment Board to develop the coast and marine tourism. He underlined the need of modern technology to develop Pakistan’s seafood industry and exports.

    FPCCI Senior Vice President Mirza Ikhtiar Baig said that conventional ways of fishing and nets needed to be replaced with the modern techniques as adopted by the rest of world. The exhibition would serve as a catalyst in the development and promotion of Pakistan’s maritime industry, he added.

    Former FPCCI president and UBG leader Khalid Tawab urged the federal government to play its due role in the development of shipping industry and reviving Pakistan National Shipping Corporation (PNSC).

    He underlined the need of fishermen training, improvement of storage system and upgradation of auction halls on international standards.

    Former Commander Pakistan Fleet Rear Admiral Arifullah Hussaini (Retd) encouraged the business community to share their vision regarding the development of shipping and fishing sector.

    https://www.thenews.com.pk/print/429906-pakistan-s-overall-exports-likely-to-reach-27-billion
     
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  2. AZADPAKISTAN2009

    AZADPAKISTAN2009 ELITE MEMBER

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    Exports are suppose to increase , as our Industrial sector , textile sector was crippled most of last 18 years due to power issues
     
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  3. Yaseen1

    Yaseen1 SENIOR MEMBER

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    Transactions should be monitoted properly the as many of exports not add foreign reserves due to hundi and under invoicing
     
  4. Baby Leone

    Baby Leone SENIOR MEMBER

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    what a shame, Pakistan should talk about 150 billion exports now:disagree:
     
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  5. N.Siddiqui

    N.Siddiqui SENIOR MEMBER

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  6. ahmedlatif

    ahmedlatif FULL MEMBER

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    then why moody give this report if pakistani export increased :undecided::undecided:


    Moody's changes Pakistan banking system outlook to negative



    [​IMG]
    Slower economic growth to contain business opportunities for banks and stall improving trend in problem loans: Moody’s

    Moody’s Investors Service has changed its outlook for the banking system in Pakistan (B3 negative) to negative from stable.

    “Over the next 12-18 months, banks in Pakistan will see their credit profiles challenged by their high exposure to the country’s low-rated sovereign debt and a slowing economy,” Constantinos Kypreos, Moody’s Senior Vice President, said in a report released Monday.

    The banks’ operating conditions will be difficult, with Pakistan’s real GDP growth slowing to 4.3% in the fiscal year ending June 2019, down from 5.8% in 2018, the report said.

    The Pakistani rupee has depreciated 30% versus the US dollar, interest rates rose by 450 basis points between December 2017 and February 2019, and inflation is rising; all factors which affect business and consumer confidence and the private sector’s debt repayment capacities, Moody’s noted.

    The agency also pointed out that Pakistan's banks face the risk of macroeconomic contagion through a range of channels, including: 1) their large holdings of government securities, which caps their credit profiles to the sovereign, and 2) from the authorities' weakening capacity to support the banks in case of need, as evidenced by the negative outlook on the sovereign rating.

    “On a more positive note, the banks will continue to benefit from stable customer deposits and high liquidity,” Kypreos added.

    The negative outlook is based on Moody’s assessment of six drivers: operating environment (deteriorating); asset risk (deteriorating), capital (stable); profitability and efficiency (stable); funding and liquidity (stable); and government support (deteriorating).

    Moody’s rates the five largest banks in Pakistan by assets. Together, these banks account for around 50% of system deposits.

    https://www.geo.tv/latest/227818-moodys-changes-pakistan-banking-system-outlook-to-negative
     
  7. Jungibaaz

    Jungibaaz MODERATOR

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    These are seperate issues. Pakistan's forex crisis and other economic imbalances and inefficiencies require long term strategies along with emergency measures in the short term.

    Any boost in exports in the short term is probably the result of a much weakened PKR, the marigns in agriculture are likely slim and PKR devaluation increased competitiveness. Certain policies are also responsible for a boost as the government has been looking for new export markets for agriculture, including China, lower import taxes on certain factors of production help industries. Over time better infrastructure that has come online and the fact that energy problems are decreasing also helps industries.

    On the Moody's article you posted.. as the article suggests this is mostly the result of broader macroeconomic conditions. Lower cosumer/business confidence, slowing economic growth, and higher inflation due to PKR devaluation, all contribute to worse prospects for banks and increases risk profiles on all loans and other assets on their balance sheets. But also, credit growth contribution to the forex crisis needs to be reigned in and imports decreased. Higher interest rates are also going to be needed to control inflation, while this might be a good thing for banks if the rate hikes come on the back of strong economic performance, as higher rates can increase margins and profitability, ours will be increasing to control inflation despite growth slowing down. Higher cost of borrowing, lower confidence, slower economic growth, and to an extent higher inflation, all feed into one another probably culminating in a worse outlook for Pakistan's banking sector.
     
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  8. VCheng

    VCheng ELITE MEMBER

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    The OP does not say exports have increased. It says they are expected to increase because of optimism:

    Not just the banking sector, but all sectors will be affected in interconnected ways related to the consequences of the decision made to deal with the BoP crisis. People at large will feel inflation reducing their buying power significantly for the next several years before it is reigned in.
     
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  9. countryman

    countryman FULL MEMBER

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    Does that figure include export of services as well? There is a leap of $13.769 and it sounds unrealistic to make that far in five months. Export of goods have reached only $13.231 Billion in seven months and unless this figure is just tricky description of exports of goods and services together - I see quoting authority too much optimistic.