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11-month economic slump ends, as exports increase in Sept

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1 year ago

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  • 4.2% increase was recorded in Sept this year.
  • In Sept last year, exports stood at $2.437 billion.
  • Imports fell sharply by 25.3% to $3.95 billion.

ISLAMABAD: The Pakistan Bureau of Statistics (PBS) reported an increase in exports by 1.15% to $2.465 billion in September 2023, for the first time in 11 months, overturning a lengthy slump attributed to the country’s dwindling economy.

According to PBS data reported by The News, the exports stood at $2.437 billion in the same month last year. The growth, it added, was modest but significant, as it happened in the wake of 11 consecutive months of year-on-year reductions ranging from 3.25% to 26.2%.

As the exports rose by 4.2% over those in August 2023 which stood at $2.366 billion, the turnaround was apparent on a monthly basis, the PBS mentioned in its report.

The shift was seen last month in August when the pace of decline slowed to single-digit from earlier sharp declines seen since October last year. Notably, year-on-year in October 2022, exports reduced by 3.25%, November 17.6%, December 16.3%, January 14.15%, February 22.7%, March 14.6%, April 26.2%, May 16.2%, June 19.1%, July 8.09%, August 4.7%, but now in September it increased by 1.15%.

The imports fell sharply by 25.3% to $3.95 billion in September 2023 from a year ago, mainly due to lower oil prices, reduced demand for machinery and raw materials, and tight import controls by the government to curb the trade deficit.

On a monthly basis, imports dropped by 12.7% from $4.5 billion in August 2023. As a result, the trade deficit narrowed by 47.9% to $1.49 billion in September 2023 from $2.86 billion in September 2022. In August 2023, the deficit was $2.16 billion.

In the first quarter of the current fiscal year (July-September 2023-24), exports fell by 3.8% to $6.9 billion, while its imports declined by 25.4% to $12.2 billion, compared with the same period of the previous fiscal year. The trade deficit shrank by 42.15% to $5.29 billion in the first quarter of FY24 from $9.16 billion in the first quarter of FY23.

In FY23, Pakistan’s trade deficit fell by 43% to $27.55 billion from $48.35 billion in FY22, as total exports dipped by 12.7% to $27.7 billion and imports contracted by 31% to $55.3 billion.

The data also showed that the trade deficit in services widened by 174% to $463 million in July-August 2023-24 from $169 million in July-August 2022-23 due to higher demand for foreign services as the economy reopened.

From July to August 2023-24, Pakistan spent $1.6 billion on the services it hired from abroad and offered its services of $1.14 billion. Similarly, in the same period last year, exports were $1.1 billion and imports of $1.28 billion. During these two months, exports increased by 2% while imports up by 24.7%. In August, services exports were valued at $600 million, while imports amounted to $789 million, resulting in a deficit of $189 million.

In July 2023, exports were at $535 million, imports at $809 million, and the deficit at $274 million. During the month under review, services exports increased by 12.14%, and imports decreased by 2.45% compared to the previous month. Comparing August 2023’services trade performance to the same month of the previous year, exports were up by 2.34%, and imports also increased by 9.1%.

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Business

Dar chairs the CCOP meeting; Blue World’s bid offer of Rs.10 billion is rejected.

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2 days ago

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The Foreign Minister/Deputy Prime Minister chaired the Cabinet Committee on Privatization meeting.

Other committee members who attended the conference included the Federal Secretaries of several Divisions, the Ministers of Finance and Revenue, Industry and Food, Commerce, Power, and Privatization.

The CCOP took the PC Board’s recommendation into consideration and suggested that Blue World’s bid of 10 billion rupees for the sale of 60% of PIACL’s shares be rejected. The bid was rejected by the CCOP, who chose to follow the PC Board’s advice.

The government’s determination to sell out PIACL through government-to-government or privatization was reaffirmed by the CCOP.

The CCOP was pleased with the Aviation Division’s evaluation of PIACL’s sound financial standing.

Additionally, the CCOP established a committee, chaired by the Minister of State for Finance, to assess potential transaction possibilities for the privatization of the Roosevelt Hotel and the appropriate modes of adoption in light of existing legal rules.

Prior to its subsequent meeting, the CCOP also ordered that all difficulties be resolved and an agreement for the selling of services to an international hotel be concluded.

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The KSE-100 Index has surged by 790 points, resulting in an all-time peak for the stock exchange.

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The benchmark KSE-100 Index increased by 790 points, marking a new all-time high for the Pakistan Stock Exchange (PSX) at 94,982 points.

The record-breaking performance underscores a surge of optimism and investor confidence in the stock market.

As investors responded to favorable economic signals, the market experienced a significant increase of over 500 points in early trading. Later, the KSE-100 Index reached another record level of 94,786 points after adding 594 points to its upward trajectory.

This positive development comes as the State Bank of Pakistan’s (SBP) foreign exchange reserves saw an increase of $84 million, reaching $11.26 billion during the week ending November 8, according to data released by the central bank on Thursday.

This represents an increase of 0.75% from the previous week. In addition, the nation’s total liquid foreign reserves experienced a modest increase, increasing by $33.7 million or 0.21% week-on-week to $15.97 billion.

In contrast, commercial banks’ reserves experienced a decline of $50.3 million or 1.06%, ultimately settling at $4.71 billion.

Furthermore, the economic team of Pakistan has expressed confidence in the discussions with the International Monetary Fund (IMF). Minister of State for Finance Ali Pervaiz Malik, in an exclusive conversation with Samaa TV, claimed talks were moving in a positive direction.

Highlighting improvements in Pakistan’s economic conditions, Malik noted substantial progress over the past six months to a year. He emphasized that Pakistan’s current economic situation has seen significant enhancement, with a reduced current account deficit of only $100 million in the first quarter, a reflection of the government’s strategy to increase remittances and boost exports.

Malik shared that discussions with the IMF are primarily focused on external financing, and while there have been speculations about a potential mini-budget or an increase in the petroleum levy, he clarified that these are currently premature considerations.

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Positive IMF negotiations propel KSE-100 Index above 94,000 points

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3 days ago

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As a result of investors’ optimism about the reported progress in the continuing talks with the International Monetary Fund (IMF), the Pakistan Stock Exchange (PSX) experienced a robust surge.

The benchmark KSE-100 Index of the PSX, which tracks market sentiment, rose 713 points to a new record high of 94,068 points, breaking above the 94,000-point barrier, as the trading session began.

Early in the day, the stock market began its upward trajectory as the KSE-100 Index steadily rose, gaining 574 points to reach 93,932 points. A possible agreement with the International Monetary Fund (IMF) might lead to more fiscal stability and back Pakistan’s economic reforms, which is why investors are so optimistic about the country’s future.

Officials from the Federal Board of Revenue (FBR) informed the International Monetary Fund (IMF) on Wednesday that the government would not be introducing a mini-budget and would instead continue to aim to collect Rs12,970 billion in taxes each year.

In line with continuing discussions with the Fund, FBR sources revealed that petroleum goods will not be subject to the General Sales Tax (GST).

The fact that Pakistan’s tax-to-GDP ratio has increased from 8.8% to 10.3%, a 1.5% gain viewed as a favorable sign of Pakistan’s fiscal policies, has reportedly pleased the IMF, who has voiced satisfaction at Pakistan’s recent economic performance.

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