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The country recorded reduction in the trade deficit in current fiscal year which was because of fall in imports.
A report published in ‘Express Tribune’ said imports were reported at $ 60.8 billion in FY18, which decreased to $ 54.8 billion in FY19. They declined further by 17% in the first six months of FY20 over the same period of last year.
According to experts it is expected that imports will remain below the $ 50-billion threshold this fiscal year.
Reports say the government has tackled a once looming crisis in the external account and averted a deepening balance of payments deficit.
Although Pakistan has been able to restrict imports and reduce the volatility in exchange rate, the challenge lies in increasing export growth.
**Pakistan needs to review economic policy
Renowned economist and former Advisor Dr Kaiser Bengali talking to IRNA on Tuesday said that imports of Pakistan are falling because the government has stopped buying raw materials urging the government to review its economic policy.
He added the shortage of raw materiala has an adverse impact on exports of Pakistan. He said that industry of Pakistan has failed to reform due to unfriendly policies of the government.
Dr. Bengali said exports be increased by setting up industries.
The economist went on to say if your industry is closing you would not be able to export anything. “It is a deep rooted problem which we are facing for past thirty years,” said Dr Kaiser Bengali.
He was also critical of government’s energy policy saying we have surplus energy but no one is interested to by expensive electricity.
The economist expressing his views said the government has always pursued anti-industry macroeconomic policy that needs to be reversed.
He said Pakistan only produces rice and cotton but they are low-value commodities. “You need to buy raw material to boost up your industry and agriculture,” he noted.
The Global Economic Prospects, published by the World Bank in January 2020, marks 2019 as a year characterised by sharp downturns in major economies and financial disruptions in emerging markets and developing economies.
It categorically states growth of global goods and services trade will slow to 1.4% in 2019 and reach 1.9% in 2020. Manufacturing activities have dropped to lower levels across emerging markets and developing economies.
In essence, the growth in exports reported by Pakistan has been an anomaly considering that several regions and country groupings are reporting a decline in export activities. Pakistan must further capitalize on the gains.
However, it is important to note that Pakistan has one of the lowest values of exports of goods and services as a percentage of gross domestic products (GDP).
Data borrowed from the World Development Indicators, published by the World Bank, indicates that with a value of 8.8%, Pakistan ranks the fifth lowest in the world.
Experts say a major constraint faced by Pakistan that limits its export growth is the low labour productivity, measured as output per worker, GDP constant 2011 international dollars in purchasing power parity.
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