July 02, 2020: The exports of Pakistan are showing clear signs of recovery, due to the efforts of the exporters to diversify the products, in the wake of new opportunities arising amid COVID 19 pandemic, and support from the Government in this regard. This was stated by Advisor to the Prime Minister on Commerce and Investment, Mr. Abdul Razak Dawood, while chairing a meeting to discuss the export strategy of Pakistan, at the Ministry of Commerce today. Seniors officers of the Ministry attended the meeting.
During the briefing, the current facts and figures related to the trend of exports were presented to the Advisor. It was explained that before the outbreak of the pandemic near the end of February 2020, Pakistan’s exports were on an upward trajectory and it showed an increase of 14% in dollar value terms, as compared to the same month last year. This momentum for February 2020 continued despite the initial outbreak of Covid-19 in the country, as the first 10 days of March 2020 registered an increase of 13% as compared to last year.
In mid-March, because of a lockdown to control the spread of the pandemic, followed by a global economic slowdown, the export-oriented industry in Pakistan suffered as reflected in March 2020 figures, which showed the decline in growth by 8% compared to the same period last year. The situation persisted and, in April 2020, the exports showed a downward trend of 54% as compared to April 2019.
After the month of April and with the efforts of the Government to encourage the export sector, the first signs of recovery were observed in the month of May 2020, which only saw a 33% decline in exports as compared to the same month last year. The momentum continued in June 2020, as the downward trend, which stood at 54% in April, 33% in May, has been brought down to a single-digit figure of 6% in dollar value terms.
In addition to a positive trend in exports, the figures also indicate the strategies for geographical and product diversification are bearing fruits. For instance, there is a significant improvement in exports to Africa, which is an outcome of ‘Look Africa Policy’, as well as the Middle East. Similarly, the export of Meat products has shown good growth, while Tobacco shows a promising future. Similarly, in the overall textile sector, value-added products have shown improvement while, at the same time, the export of cotton yarn and fabric has gone down. As a result of overall progress, the trade balance has improved by $8.7 Billion, which shows that the Current Account Deficit is also at manageable levels.
Commenting on the trends of exports, Mr. Razak Dawood underscored that the export sector has been given a new impetus by the Government by allowing the export of Personal Protective Equipment, barring three items, which is indicated by the surge of exports in the month of June. He added that other policies of the Government, for diversification of exports and international markets, will enable us to continue the thrust in the current fiscal year as well. The Advisor noted that the traditional exports of Pakistan, like garments and bedwear, etc., are also picking up and would show improved performance in the new financial year 2020-21.
Talking about the export strategy, the Advisor reiterated that greater emphasis will be on product diversification, including engineering products, pharmaceuticals, agro products, and services. He remarked that the beginning of export of home appliances and geographical diversification of cement export to China and the Philippines are clear signs of success. Mr. Razak Dawood added that he remains optimistic towards achieving the export targets in the new fiscal year and the policy of product and geographical diversification will continue to be actively pursued for success in this regard.