ISLAMABAD, May 31: Euro-zone debt crisis which is escalating and dragging down the global economy, is feared to impact Pakistan’s trade growth, says the economic survey 2011-12.
Almost 17 per cent of the country’s total exports are destined to the eurozone and problems in this area can impact the trade.
Several countries of eurozone are important trading partners of Pakistan and problems there may impact both volume and terms of trade.
A contraction in the global economy affects the level of country’s exports, foreign direct investment and home remittances adversely.
According to the survey, exports declined while imports continued to grow during the period under review.
During the July-April period of 2011-12, exports stood at $20,474 million while growth of imports at 14.5 per cent remained more or less the same as growth in the corresponding period in the previous year.
The current account deficit stood at $3,394 million during July-April 2011-12 largely caused by the widening of trade and services account deficits.
The major factor behind the widening of the trade deficit was the sharp rise in the import bill during July-April 2011-12 which increased due to the higher international prices of crude oil.
The value of exports from the food group stood at $3509.7 million during the first 10 months of the current fiscal year as compared to $3597.6 million in the corresponding period last year, thereby showing a negative growth of 2.4 per cent.
In absolute terms, this represents a fall of $87.9 million.
The major factors behind the overall fall in food exports remain wheat, rice and vegetables.
Rice exports followed last year’s trend and declined by 3.2 per cent during July-April period.
This fall was due to the overall quantum exports of rice by 9.1 per cent during the period.
The major reason behind the fall in rice export remained the higher availability of rice internationally.
Wheat exports declined due to the internationally lower demand and prices as quantity and unit value of wheat both witnessed a negative growth of 70.6 per cent and 8.3 per cent, respectively.
On the other hand, fruit exports witnessed a major increase during 2011-12; in absolute terms fruit exports increased by $70.5 million during July-April period.
In contrast to the 32.1 per cent growth in July-April 2010-11, textile exports declined by 9.6 per cent during July-April 2011-12 period, and the fall was mainly due to decline in quantity of exports, the majority of the textile categories showed a negative growth in quantity.
The negative effects of the energy shortages domestically and the slowdown of global demand are especially visible in the decline in the quantity of exports despite the increase in the unit values of the majority of items during July-April 2011-12 period.
The structure of imports indicates that food group imports accounted for 11.4 per cent of total imports and showed a negative growth rate of 1.7 per cent during July-April 2011-12 period compared to last year.
The import bill for edible oil increased by 16.5 per cent and added $273 million to this year’s import bill.
Palm oil imports surged in quantity, value and per unit value as it increased by 5.1 per cent, 18.3 per cent and 12.5 per cent respectively.
The import of petroleum group products grew by 43.5 per cent during July-April 2011-12 against the 8.4 per cent growth in the corresponding period last year, reflecting mainly the impact of higher international oil prices.
The import of consumer durables added $229.8 million to the overall import bill.
The increase is generally the outcome of fall in duties on automobiles, deep freezers, air-conditioners and beverages along with the cut in taxes.
Telecom imports grew by 22.9 per cent to witness an increase of $195.2 million.
The machinery group imports decreased to $3148.4 million in July-April 2011-12 as against $3595.9 million during corresponding period last year.
The import of products in the raw material group surged by 7.4 per cent and accounted for 22.4 per cent of total imports during July-April 2011-12 period.