Pakistani exports register setback in march 2020
ISLAMABAD - Pakistani exports register setback in march 2020 due coronavirus outbreak.
Pakistan’s exports witnessed a 15.56% decline in March 2020 due to the impact of coronavirus. The value of exports dropped from $2.14 billion in the previous month to $1.8 billion, according to Pakistan Bureau of Statistics
Imports for March went down to $3.30 billion, down by 19.80% as compared to $4.19 billion in February 2020. The Trade deficit was recorded at $1.49 billion in March 2020 as compared to $2.04 billion in February 2020, down by 27.04% month on month.
However, in March 2020, Pakistan’s trade deficit was reduced by 30% to $1.49 billion as compared to $2.15 billion recorded in the same month of 2019. This is the lowest trade deficit recorded since February 2015 and 61 month-low, according to a report by Arif Habib Ltd.
Year on year, March exports were down by 8.46% to $1.80 billion as compared to $1.97 billion recorded in March 2019. However, the imports were down by 19.85% to $3.29 billion as compared to $4.11 billion in 2019. Trade deficit down due to falling imports
While talking to ProPakistani, Dr. Aadil Nakhoda, an economist and Assistant Professor at IBA, Karachi, said:
“This is as expected. Exports have decreased due to a slowdown in global economy. However there is an uncertainty in exports as there is a delay between when orders are placed and receipts reported. Low demand from EU and US buyers of consumer goods that Pakistan typically sells to is likely to persist if the pandemic is not controlled. It will be interesting to see how the food group reacts in terms of exports as that comes under essential products for Pakistan as well as its trading partners.”
Imports are falling faster than exports, which has led to a decline in trade deficit. Furthermore, he stated that this is not a good sign as a driver of the decrease in imports is price adjustments in oil due to lack of global demand and Saudi-Russia spat.
Dr. Aadil Nakhoda further added that it will become ever more challenging for the exporters as they will need to improve their market intelligence. He said the current figures for exports may not be fully reflecting the fall in economic activity if orders were placed in advance. However, there may be adjustments to payment schedule and concessions may have been provided by the exporters to customers abroad. “Unfortunately, the numbers do not reveal the complete picture,” he added
He further added that imports were down due to price adjustments (also likely seen in exports of commodities) in major commodities, particularly fuel. The demand in Pakistan for imported goods is likely to be adversely impacted as well. The results will become apparent in subsequent releases on trade data by PBS. It is important to mention that year-on-year values have been typically on a downward trend in recent years though, implying the government policies to curtail imports.
“We have to worry if exports do not adjust back as quickly,” he added while stating that oil prices are likely to adjust once pandemic issues are mitigated and demand starts increasing.