Road to re­cov­ery

Enterprise - - Editor’s desk -

Pak­istan has set a new ex­port record in 2010-2011 by at­tain­ing a fig­ure of $24.827 bil­lion ac­cord­ing to the Fed­eral Bureau of Sta­tis­tics. This amounts to a 28.7 per­cent in­crease com­pared to $19.29 bil­lion recorded in the last fi­nan­cial year. This ro­bust growth in ex­ports and sta­ble ex­change rate is also backed by a phe­nom­e­nal in­crease in for­eign re­mit­tances. Fur­ther­more, de­spite the eco­nomic down­turn in Europe and the US, Pak­istan is on course to de­liver an even higher ex­port per­for­mance in the next fis­cal year.

In terms of the im­prov­ing tex­tile ex­ports per­for­mance, the main rea­son is the in­creas­ing price of tex­tile prod­ucts in the in­ter­na­tional mar­ket and the in­creas­ing in­ter­na­tional com­pet­i­tive­ness of lo­cal tex­tile prod­ucts. An anal­y­sis of Pak­istan’s high­est top 10 ex­port value prod­ucts dur­ing July 2010 to April 2011 shows that the main driver of this im­pres­sive ex­port record was the tex­tile sec­tor which earned nearly $11.18 bil­lion, show­ing 32.37 per­cent growth. The agri­cul­ture and food sec­tor ex­ported pro­duce worth $1.7 bil­lion with a growth of al­most 91.19 per­cent as com­pared to the cor­re­spond­ing pe­riod in the last fi­nan­cial year. Min­er­als and met­als, engi­neer­ing goods and leather prod­ucts reg­is­tered a growth of 32.92 per­cent, 16.98 per­cent, and 25.95 per­cent, re­spec­tively. Other important ex­port items in­cluded bed­wear, ready­made gar­ments, rice, petroleum prod­ucts, raw cot­ton and tow­els. How­ever, it is feared that the coun­try may not be able to main­tain the cur­rent pace in ex­port growth in fi­nan­cial year 2012 as the price of cot­ton has started de­clin­ing in the in­ter­na­tional mar­ket which could ad­versely af­fect tex­tile prod­ucts.

Ac­cord­ing to the Fed­eral Bureau of Sta­tis­tics (FBS) and the Trade De­vel­op­ment Au­thor­ity of Pak­istan, tex­tile ex­ports grew by 30.38 per­cent from July 2010 to March 2011. While some of this in­crease can be at­trib­uted to the rise in the in­ter­na­tional price of cot­ton and other in­puts, Pak­istan’s ex­ports have in­creased sig­nif­i­cantly in terms of qual­ity as well. This re­flects on the in­creased de­mand for Pak­istani tex­tile goods in Europe and the US, where buy­ers are will­ing to pay higher prices for Pak­istani tex­tiles and are also buy­ing more of them. This is a very good sign for the Pak­istani tex­tile in­dus­try. Tex­tile ex­ports had a share of 55 per­cent in the coun­try’s to­tal ex­ports of $17.79 bil­lion dur­ing July-March 2010-2011. The share has reduced as it used to be more than 66 per­cent in the past. This does not, how­ever, re­flect neg­a­tively on tex­tile ex­ports but, in fact, sig­ni­fies the in­crease in ex­ports from other sec­tors.

The Pak­istani econ­omy pre­sented a con­sid­er­ably gloomy out­look when the State Bank Gover­nor Shahid Kar­dar re­signed. The act­ing SBP Gover­nor Yaseen An­war took the stage and, while un­veil­ing the Mon­e­tary Pol­icy State­ment, an­nounced a re­duc­tion in the cen­tral Bank’s pol­icy rate by 50 ba­sis points (bps) to 13.5 per­cent with ef­fect from Au­gust 1. It is to be hoped that this action, com­bined with the coun­try’s en­cour­ag­ing ex­port per­for­mance and fur­ther bol­stered by proac­tive mea­sures be­ing pur­sued by the gov­ern­ment on the en­ergy front, will en­able the econ­omy to climb out of the pits and be­come vig­or­ous again

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