Featured Exports fall but trade balance improves

[Patriot forever]

Exports in August Dropped by 19.5% Due to Monsoon Rains: Ministry of Commerce
Posted 20 hours ago by Jehangir Nasir

Exports for the month of August 2020 have recorded a downfall of 19.5%, in dollar value, as compared to the same period last year.

This was discussed in an internal review meeting at the Ministry of Commerce today, chaired by the Advisor to the Prime Minister on Commerce and Investment, Mr. Abdul Razak Dawood.

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During the same month, the imports also dropped by 20% as compared to August 2019. Similarly, the overall trade balance has improved by 20.6% in August 2020 compared to the same month last year.
Despite the decline in August, some of the products, like tractors, iron, and steel, chemicals, and cement have posted a growth of 186%, 100%, 90%, and 30% respectively compared to August 2019.

It was mentioned in the meeting that due to heavy rains in the country, there were delays in obtaining and analyzing the data. It was further discussed in the meeting that the rains and consequential urban flooding, particularly in Karachi, caused significant problems in the existing infrastructure, disrupting the supply chains and affecting the exports.

Power outages, slow business activities, delays in transportation, and hampering of port operations are some of the issues faced by the exporters due to unprecedented monsoon rains in the country.

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“However, the positive sign is that regardless of this temporary decline, Pakistan’s trade balance continues to improve,” said Dawood. However, no official numbers were disclosed.

It is worth mentioning that the Commerce Ministry usually releases provisional foreign trade figures during the first few days of each month in case of slight variation (negative or positive) in exports and a substantial decline in imports.

Pakistan Bureau of Statistics (PBS) is expected to release provisional foreign trade figures within the next few days or so.

Dr. Aadil Nakhoda, an economist and Assistant Professor at IBA, Karachi, told ProPakistani,

The Advisor stated that the exporters are encouraged that despite the calamity of rain and flooding, they must pursue Make in Pakistan policy and export-led growth.

“I have every confidence in our exporters that they will make up for the loss of August,” the Advisor said.
On August 26, 2020, Razak Dawood said that because of heavy rains, particularly in Karachi, Pakistani export consignments are being delayed, hence exports in August may be affected.

Exports in August Dropped by 19.5% Due to Monsoon Rains: Ministry of Commerce

Exports for the month of August 2020 have recorded a downfall of 19.5%, in dollar value, as compared to the

propakistani.pk

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This should finailly show people the real value of Karachi. We control the faith of Pakistan in terms of money, and to certain degree security. Yet supporters of PPP are so blinded, they will continue to support the party even when there is plenty of evidence of how they loot Karachi/Pakistan.

People here don't realize the situation Karachi was in in the last 10 days of August. It was hard to move around in a car, let alone trucks. Delayed shipments will hopefully show up in the next months data both imports and exports.

 

[aasimanwaar]

We are lucky that our trade balnce is not tipping over toward import as in the past. There is a consistent trend where our Trade deficit and current account deficit is reducing tremendously which is what we need for a stable economy.

There is no need to import billions of dollars worth luxury goods if we are unable to export with the same pace. Imports should be dropped further bcz there are still so many areas where we are wasting our money. I would recommend high tax over goods imported by Pakistani Elitiyas. An ordinary Pakistan in middle income and lower bracket has no sense of branded good and those who are eager can easily pay double for it.

http://www.sbp.org.pk/ecodata/BOP-Services/bop.pdf

Reduced Trade deficit is good but other side its killing ability of government to generate revenue earned from imports.

 

[Pandora]

Reduced Trade deficit is good but other side its killing ability of government to generate revenue earned from imports.

We need a sustainable economy not an artificially ballooned one with high imports. We need to match our imports and exports if we want to rid us the menace of External loans.

 

[The Accountant]

So Very early the propaganda of reviving of economy is over .Last month celebration of Current Account + .As in fundamental this scenario is going to effect Pakistan very badly .

Current account should have been still positive. Current account includes workers remittances which hovers around 2 billion a month. as the gap between export and import is just 1.4 billion dollar which means current account has a positive number of around 0.6 billion dollars.

TO give you a prospective, during last year of pmln monthly average current account deficit was 1.6 billion dollar v/s 0.6 surplus as of today hence a change of 2 billion per month. whereas trade deficit (export minus import by end of 2018 was 2.4 billion a month hence an improvement of 1 billion a month in trade deficit.

In reality imports are being substituted by local goods. in my own organization where we had 10% to 15% imported raw material now haven't import anything since April 2018 as sourcing of similar product is now comparatively cheap locally now.

 

[Syed1.]

August had Eid ul Adha, Muharram jaloos and rain flooding. Explains why trade numbers are hit.

If only exports had dropped while imports held steady then you could have blamed shody policies but since both saw a marked decline then all the factors I mentioned had an effect. Looking forward to performance in September.

Should be noted despite an August full of disruptions the July-August revenue collection is up 8% year on year.

Well done PTI

 

[Pakistan Space Agency]

$1 = Rs 166 Pakistani Rupee
$1 = Rp 14,795 Indonesian Rupiah
$1 = IRR 42,025 Iranian Rial
$1 = TRY 7,444,400 Turkish Lira

None of the above are large exporting nations despite all having such weak devalued currencies.

 

[Syed1.]

$1 = Rs 166 Pakistani Rupee
$1 = Rp 14,795 Indonesian Rupiah
$1 = IRR 42,025 Iranian Rial
$1 = TRY 7,444,400 Turkish Lira

None of the above are large exporting nations despite all having such weak devalued currencies.

South Korea is number 5th on Ease of doing business ranking. They have annual exports of $580b (roughly twice the size of our economy). The currency in South Korea is Won. For 1 US$ you can get approximately 1,200 Wons.

 

[Bilal Khan (Quwa)]

$1 = Rs 166 Pakistani Rupee
$1 = Rp 14,795 Indonesian Rupiah
$1 = IRR 42,025 Iranian Rial
$1 = TRY 7,444,400 Turkish Lira

None of the above are large exporting nations despite all having such weak devalued currencies.

bro compared to Pakistan...Indonesia exports 9X more, Iran 5X more (despite sanctions), and Turkey 9X more. Not only that, but at least Turkey is exporting increasingly advanced items (like defence) so it's closing in on its trade gap (but its overall account benefits from steady FDI).

 

[Kabotar]

bro compared to Pakistan...Indonesia exports 9X more, Iran 5X more (despite sanctions), and Turkey 9X more. Not only that, but at least Turkey is exporting increasingly advanced items (like defence) so it's closing in on its trade gap (but its overall account benefits from steady FDI).

Not to mention but tourism industry in these three countries on their own might be bigger than or exports and remittances combined.

 

[Pakistan Space Agency]

bro compared to Pakistan...Indonesia exports 9X more, Iran 5X more (despite sanctions), and Turkey 9X more. Not only that, but at least Turkey is exporting increasingly advanced items (like defence) so it's closing in on its trade gap (but its overall account benefits from steady FDI).

That maybe so but Bangladesh and Malaysia have stronger currencies than Pakistan and they also export more than Pakistan.

$1 = MYR 4.15 Malaysian Ringgit
$1 = BDT 84.80 Bangladeshi Taka

I don't know why and how Pakistani people fell for this foreign imposed belief that devaluing the currency automatically means increase in exports despite there's nothing there to increase the exports with.

Is anybody aware of $40 billion worth of exportable goods stored in the country that are only pending further currency devaluation? No.​

​

If Pakistani currency is devalued to Rs1,000 to a dollar today, will that suddenly double Pakistani exports tomorrow? No.​

People seem to keep forgetting that Pakistan is a very large country in size and also in population. It's infrastructure is extremely under-developed, does not have the capacity to manufacture large scale exportable goods while at the same time national consumption outstrips national demand at any one time.

The country added around 21 million more citizens between 2013-2018 and the situation hasn't changed today.

This country needs hundreds of billions of dollars to develop it's infrastructure but no one lends it except without imposing difficult conditions on the country, such as; you fight our war and we will help you with access to international finance.

The country has faced at least 8 rounds of US sanctions since 1965 ensuring it's development goes nowhere.

 

[Bilal Khan (Quwa)]

That maybe so but Bangladesh and Malaysia have stronger currencies than Pakistan and they also export more than Pakistan.

$1 = MYR 4.15 Malaysian Ringgit
$1 = BDT 84.80 Bangladeshi Taka

I don't know why and how Pakistani people fell for this foreign imposed belief that devaluing the currency automatically means increase in exports despite there's nothing there to increase the exports with.

Is anybody aware of $40 billion worth of exportable goods stored in the country that are only pending further currency devaluation? No.​

​

If Pakistani currency is devalued to Rs1,000 to a dollar today, will that suddenly double Pakistani exports tomorrow? No.​

People seem to keep forgetting that Pakistan is a very large country in size and also in population. It's infrastructure is extremely under-developed, does not have the capacity to manufacture large scale exportable goods while at the same time national consumption outstrips national demand at any one time.

The country added around 21 million more citizens between 2013-2018 and the situation hasn't changed today.

This country needs hundreds of billions of dollars to develop it's infrastructure but no one lends it except without imposing difficult conditions on the country, such as; you fight our war and we will help you with access to international finance.

The country has faced at least 8 rounds of US sanctions since 1965 ensuring it's development goes nowhere.

Yes part of it has to do with policy-based devaluation, but the other part is that the world market itself has judged a low-rate for the PKR (i.e., free-floating exchange rate). The reality is that there's less demand for PKRs because, truthfully, we're not exporting anything of value and/or in-demand to the world market.

For example, if we had been an oil/gas producer, then the PKR would go up by virtue of the fact that the world market needs our natural resources. To access our oil/gas, they'd buy up PKRs, thereby reducing the supply of PKRs and, in turn, raising the PKR's value. As a result, the PKR has more purchasing power.

However, that's not the case with us. We're not exporting enough, hence there's less demand for the PKR. To encourage more demand for our goods, we've allowed the PKR to drop. On the other hand, if for some reasons our exports surge (e.g., we start exporting higher valued manufactured goods), the PKR will go up on its own too -- unless we artificially peg it to stay lower (which I doubt, since we'd need a stronger PKR so as to lessen the fiscal cost of importing fuel, machinery, etc).

Finally, to artificially maintain a higher PKR, we'd need loans. This is exactly what the PML had done to keep a higher PKR. But that policy basically resulted in an import-rich culture because -- and wrongfully so -- Pakistanis thought foreign goods were affordable to them. Now, the poor/middle class must pay for that mistake by servicing the debt the PML spent to prop up the PKR.

Basically, it's a situation of the poor subsidizing the livelihoods of the rich (because it was the wealthier class who took the most advantage of the stronger PKR to import, while poor/middle class must pay in taxes and less development in order to repay that debt + interest).

 

[Nike]

That maybe so but Bangladesh and Malaysia have stronger currencies than Pakistan and they also export more than Pakistan.

$1 = MYR 4.15 Malaysian Ringgit
$1 = BDT 84.80 Bangladeshi Taka

I don't know why and how Pakistani people fell for this foreign imposed belief that devaluing the currency automatically means increase in exports despite there's nothing there to increase the exports with.

Is anybody aware of $40 billion worth of exportable goods stored in the country that are only pending further currency devaluation? No.​

​

If Pakistani currency is devalued to Rs1,000 to a dollar today, will that suddenly double Pakistani exports tomorrow? No.​

People seem to keep forgetting that Pakistan is a very large country in size and also in population. It's infrastructure is extremely under-developed, does not have the capacity to manufacture large scale exportable goods while at the same time national consumption outstrips national demand at any one time.

The country added around 21 million more citizens between 2013-2018 and the situation hasn't changed today.

This country needs hundreds of billions of dollars to develop it's infrastructure but no one lends it except without imposing difficult conditions on the country, such as; you fight our war and we will help you with access to international finance.

The country has faced at least 8 rounds of US sanctions since 1965 ensuring it's development goes nowhere.

you need to reform your economy first, let the economic liberated itself from the shackle of unbridled and irresponsible law or acts. Without economy freedom, there is little incentive for your economy actors to act and do the activity of economy like import and export. Any executives looking for growth opportunities, they argue all the same, should ask the same questions about the investment climate that they ask in more familiar settings: How high are the taxes? What regulations and licenses will we have to worry about? How easy is it to send goods and profits back and forth? If the regulation itself quite chocking no one is willing to conduct business. In short too much regulation is discouraging private businesses from investing.

 

[Indos]

$1 = Rs 166 Pakistani Rupee
$1 = Rp 14,795 Indonesian Rupiah
$1 = IRR 42,025 Iranian Rial
$1 = TRY 7,444,400 Turkish Lira

None of the above are large exporting nations despite all having such weak devalued currencies.

Bro, I think for Turkey your data is very wrong.

@Kamil_baku bro how much is 1 USD to Turkish Lira ?

 

[RadarGudumluMuhimmat]

Bro, I think for Turkey your data is very wrong.

@Kamil_baku bro how much is 1 USD to Turkish Lira ?

How many lira the dollar is is in constant change, but in this micro-economy it is tiring for citizens only in the spending phase. Under normal circumstances, the Turkish minimum wage scheme is indexed to 400 US dollars.

 

[volatile]

Current account should have been still positive. Current account includes workers remittances which hovers around 2 billion a month. as the gap between export and import is just 1.4 billion dollar which means current account has a positive number of around 0.6 billion dollars.

TO give you a prospective, during last year of pmln monthly average current account deficit was 1.6 billion dollar v/s 0.6 surplus as of today hence a change of 2 billion per month. whereas trade deficit (export minus import by end of 2018 was 2.4 billion a month hence an improvement of 1 billion a month in trade deficit.

In reality imports are being substituted by local goods. in my own organization where we had 10% to 15% imported raw material now haven't import anything since April 2018 as sourcing of similar product is now comparatively cheap locally now.

Imagine a picture where Exports are not grown ,Imports have been curtailed .LSM - .GDP - ,Infaltion all time high .By the way if current account is Positive (for now) why Dollar keeps inching up ?