OFFICIAL trade data reveals that the trend of improvement in exports is subsiding and the situation might deteriorate further in the backdrop of local and global curbs related to Covid-19 that could result in subdued production and demand.
According to the Pakistan Bureau of Statistics (PBS), exports stood at $2.07 billion in February 2021, 3.63% lower than January 2021 and 3.23% lower than February 2020.
It is all the more alarming that the trade deficit was 26% higher in February 2021 compared to the same month last year as imports surge from $4.17 billion in February 2020 to $ 4.62 billion in February 2021.
Trade deficit during the first eight months of the current financial year was 10.9% higher than the same period last year.
The fall in exports and rise in imports should be a cause for concern for the Government as the trend would complicate financial woes of the country in months to come.
The Government is taking refuge behind the oft-quoted plea of a surge in import of plants and machinery, which could prove to be beneficial for the economy in the long run but such anticipations did not materialize in the past.
The Government definitely deserves credit for checking imports and bringing down the trade deficit but the more sustainable approach would be to increase exports, which are unlikely to pick up substantially due to rising cost of input.
Resumption of the IMF programme is being seen as a positive development by some experts arguing that it would send a positive signal to other donors and trade partners but the conditions attached to the programme particularly substantial increase in electricity and gas tariff and withdrawal of tax exemption would upset production and exports.