The improvement in balance of trade during 4MFY23 largely
comes on the back of easing import bill, which has come off by 12.4%YoY during
the period under review to clock in at US$21.1 billion. Exports have actually
posted a slight increase of 1.1%YoY to settle around US$9.6 billion.
Country’s largest export oriented sector, Textiles and
clothing has reported a decline of 1.3%YoY during 4MFY23 and remained at US$5.9
billion as compared to US$6.0 billion during the same period of last year.
Cotton yarn exports registered 27.7%YoY decline in July-October
to US$285.315 million as compared to US$394.8 million during the same period
last year.
Bed wear exports declined by 9%YoY to US$1.0 billion from
US$1.1 billion during the same period.
As against this, Knitwear exports increased by 7%YoY to
US$1.7 billion which contained the overall decline in textile exports.
Moving forward, the outlook of textile exports remain hazy owing
to unavailability of gas to the sector during winters and a global slowdown
expected to impact demand.
Country’s import bill continued to contract, declining by 16%YoY
owing to slowdown in economy and high base effect.
The largest declines were registered in the categories of
Petroleum and machinery groups imports, posting declines of 47%YoY and 40%YoY
respectively and were the key reason for an overall decline in imports.
Food imports grew by 10%YoY during the period under review
to US$3.4 billion owing to higher Wheat (local crop destruction) and Palm Oil
imports (shift from crude imports to refined imports).
With global economy heading towards a slowdown as the major
central banks around the world jack up their interest rates, the quantum of world
trade is likely to contract significantly.
The global commodity prices are also likely to ease off
significantly which bodes well for Pakistan.
Conversely, the country’s exports will also contract as the
country’s largest export oriented industry struggles against the unavailability
of gas. Consequently, analysts expect FY23 to close with a CAD of 3% of GDP.
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