ISLAMABAD, 24 November 2003 — Pakistani imports are rising fast as export earnings are increasing, too, and the trade balance improves.
Both imports and exports can overshoot the fiscal 2004 targets — a prospect that will be cheered by Pakistan’s foreign trade partners, particularly the countries that exports a good deal of machinery, capital goods and a range of consumer products to this country.
Imports in July to October, the first four months of fiscal 2004, reached a record $4.283 billion, up 12.89 percent compared to the like period of 2003 when these were $3.794 billion. All indications are that as a result of the economy picking up, even though slow, 2004 will end overshooting the all-year official projection of $12.8 billion. Imports in October totaled $1.171 billion or 15.6 percent higher than last year’s similar period when these were $1.017 billion.
It will be of interest to exporters of capital goods to Pakistan that Islamabad’s import of machinery rose 17.66 percent to $1,015.77 million in the first four months of fiscal 2004.
The share of machinery and capital goods in the overall imports was 23.71 percent — up from 22.75 percent in the same period of 2003. The trend seems to be strengthening.
Some of the largest imports included autos and transport vehicles, power generators, machinery for construction and mining, electrical machinery, aircraft and boats, office and data processing machines, agricultural equipment, farm chemicals and fertilizers, and plastics.
Industrial raw materials included metals, iron and steel scrap, paper, paper board, jute, and finished rubber tires and tubes.
Exports during the four-month period rose to a record $3.974 billion - a 14.2 percent increase over $3.480 billion in the similar period of 2003. Exports in October alone totaled $1.006 billion, and compared to October, 2002 were 12.87 percent higher.
As a result, the balance of trade (BoT) for these four months narrowed down to (minus) $309.592 million, compared to (minus) $314.623 million in the like period of fiscal 2003.
The government projects total imports for full fiscal 2004 to reach a level of $12.8 billion, and exports $12.1 billion, leaving BoT at $700 million, down from $1.1 billion in 2003, which is now reachable.
In order to earn more forex, Pakistan is diversifying its exports markets and goods and services.
Commodity exports in 1981 were 44 percent of all exports. These were brought down to 19 percent by 1991, and to 12 percent by 2001.
Export of manufactured goods rose from 45 percent in 1981 to 57 percent in 1991, and 77 percent in 2003. During this period, exports of semi-manufactured goods were 11-14 percent.
Most of exports, at present go to half a dozen or so countries. Exports are concentrated in textiles, accounting for $8 billion in forex earnings in 2003 - more than two-thirds of total export value.
But, it is certain that the contribution of textiles, and their valued-added products in the overall exports will rise further in the years to come, as the country prepares itself to face the textile-quota free regime. Textile industry has, over the last three years, invested around $ 3.5 billion in machinery imported from several countries, including Europe, Japan and China to further upgrade its production.
Islamabad expects to double its textile exports to $15 billion in the next two years or so.
While trying to gear up and upgrade domestic industrial production, Pakistan is also endevoring to reach out and diversify its export markets and goods. These efforts cover Turkey, Iran, in the West, and Sri Lanka, Bangladesh, India, South and East Asia, and China.
