ISLAMABAD – Pakistani exports register setback in march 2020 duecoronavirus outbreak.
Pakistan’s exports witnessed a 15.56% decline in March 2020 due to theimpact of coronavirus. The value of exports dropped from $2.14 billion inthe previous month to $1.8 billion, according to Pakistan Bureau ofStatistics
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 $1.49billion in March 2020 as compared to $2.04 billion in February 2020, downby 27.04% month on month.
However, in March 2020, Pakistan’s trade deficit was reduced by 30% to $1.49billion as compared to $2.15 billion recorded in the same month of 2019.This is the lowest trade deficit recorded since February 2015 and 61month-low, according to a report by Arif Habib Ltd.
Year on year, March exports were down by 8.46% to $1.80 billion as comparedto $1.97 billion recorded in March 2019. However, the imports were down by19.85% 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 andAssistant Professor at IBA, Karachi, said:
“This is as expected. Exports have decreased due to a slowdown in globaleconomy. However there is an uncertainty in exports as there is a delaybetween when orders are placed and receipts reported. Low demand from EUand US buyers of consumer goods that Pakistan typically sells to is likelyto persist if the pandemic is not controlled. It will be interesting to seehow the food group reacts in terms of exports as that comes under essentialproducts for Pakistan as well as its trading partners.”
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Imports are falling faster than exports, which has led to a decline intrade deficit. Furthermore, he stated that this is not a good sign as adriver of the decrease in imports is price adjustments in oil due to lackof global demand and Saudi-Russia spat.
Dr. Aadil Nakhoda further added that it will become ever more challengingfor the exporters as they will need to improve their market intelligence.He said the current figures for exports may not be fully reflecting thefall in economic activity if orders were placed in advance. However, theremay be adjustments to payment schedule and concessions may have beenprovided by the exporters to customers abroad. “Unfortunately, the numbersdo not reveal the complete picture,” he added
He further added that imports were down due to price adjustments (alsolikely seen in exports of commodities) in major commodities, particularlyfuel. The demand in Pakistan for imported goods is likely to be adverselyimpacted as well. The results will become apparent in subsequent releaseson trade data by PBS. It is important to mention that year-on-year valueshave been typically on a downward trend in recent years though, implyingthe government policies to curtail imports.
“We have to worry if exports do not adjust back as quickly,” he added whilestating that oil prices are likely to adjust once pandemic issues aremitigated and demand starts increasing.
