Saturday, October 31, 2020

Pakistan's Exports Surging At The Fastest Rate in South Asia

With several major brands moving production to Pakistan amid the COVID19 pandemic, the country's exports have grown at a faster pace than those of Bangladesh and India, according to Bloomberg News. Pakistan's total textile shipments rose 7% in September, compared with India’s 6% and  Bangladesh’s 3.5%. 

South Asia Region's Exports. Source: Bloomberg

“Pakistan has seen orders shifting from multiple nations including China, India and Bangladesh,” said Shahid Sattar, secretary general at the All Pakistan Textile Mills Association, in an interview with Bloomberg's Faseeh Mangi. “Garment manufacturers are operating near maximum capacity and many can’t take any orders for the next six months.”

Pakistan's Textiles Growth. Source: Bloomberg

Bloomberg attributed Pakistan's export surge to Prime Minister Imran Khan’s administration  to be the first in South Asia  to ease the COVID19 lockdown after controlling the spread of the disease. It helped draw companies like Guess Inc., Hugo Boss AG, Target Corp. and Hanesbrands Inc.

Investor Confidence: 

 Pakistan's benchmark stock index KSE-100 has soared 52% since March, beating runners-up Vietnam and India, and gaining twice as much as China, according to Bloomberg News. In spite of the rapid rise, the valuation of the KSE-100 listed companies is among the world's lowest with forward price-earnings multiple of just 7.4 times. Pakistan is heading for an IPO spree, with as many as 10 companies lining up to go public.

IPO Spree in Karachi Stock Market. Source: Bloomberg

V-Shaped Recovery:

With coronavirus spread contained, Pakistan economy is rebounding with V-shaped economic recovery.   Pakistanis have once again defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. The nation's monthly Quantum Index of Manufacturing (QIM) for July 2020 has returned to where it was a year ago in July 2019, according to data released by Pakistan Bureau of Statistics.  Meanwhile, the number of daily new cases has declined from over 6,000 a day in June to around 500 a day now. There has also been dramatic reduction in hospital admissions and the need for intensive care. The LSMI output increased by 5.02% for July, 2020 compared to July, 2019 and 9.54% in June, 2020.  The recovery in manufacturing is quite broad, extending from cement production to fuel sales and growing demand for automobiles to home appliances, according to Bloomberg News.  Pakistan has successfully overcome the challenges posed  by the pandemic and its economic impact. Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.

Covid19 Cases in Pakistan. Source: Our World in Data

Broad Recovery: 

The recovery in manufacturing is quite broad, extending from cement production to fuel sales and growing demand for automobiles to home appliances, according to Bloomberg News. The nation's monthly Quantum Index of Manufacturing (QIM) for July 2020 has returned to where it was a year ago in July 2019, according to data released by Pakistan Bureau of Statistics.  Meanwhile, the number of daily new cases has declined from over 6,000 a day in June to around 500 a day now.  There has also been dramatic reduction in hospital admissions and the need for intensive care. The LSMI output has increased by 5.02% for July, 2020 compared to July, 2019 and 9.54% if compared to June 2020. Month-wise trend of QIM from July, 2018 to July, 2020.    

Pakistan Monthly Quantum Index of Manufacturing. Source: PBS

Cement Sales: 

Pakistan is once again experiencing a construction boom with new incentives under Naya Pakistan Housing Program. Monthly cement sales rose to near all-time high of almost 5 million tons in July 2020 as construction activity picked up in both housing and CPEC-related projects. 

Pakistan Cement Sales. Source: Bloomberg

Car Sales:

Gasoline sales in June, 2020 hit new record  and local car deliveries rose to about 10,000 units as people returned to work after easing of lockdown in May, 2020. Kia Motors Corp.’s local unit is planning to add a second shift at its factory in Karachi from January.  

Pakistan Car Sales Recovery. Source: Bloomberg

Multiple Sectors Growing: 

Sectors including food, beverages & tobacco, coke & petroleum products, pharmaceuticals and non metallic mineral products saw an increase in production in July 2020.  Muzzammil Aslam, chief executive officer at Tangent Capital Advisors Pvt., was quoted by Bloomberg as saying, “It has surprised everybody".  Aslam expects Pakistan economy at 4%-5% in current fiscal year, higher than the government’s 2.1% target. “The growth is led by an aggregate demand push.”


Pakistanis have defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. Pakistan has successfully fought off the deadly COVID19 virus and begun to bounce back economically. With several major brands moving production to Pakistan, the country's exports are rebounding faster than its peers in South Asia.  Moody's rating agency has raised Pakistan's economic outlook from "under review for downgrade" to "stable". Pakistan's Planning Minister Asad Umar is talking of a "V-shaped recovery". Monthly cement sales have rebounded to pre-pandemic level, fuel sales have increased, tax collection is up,  exports are rising and the Karachi stock market is booming again. Prime Minister Imran Khan and Army Chief General Javed Bajwa have been on the same page in tackling the health and economic crises faced by Pakistan. Contrary to the critics of Pakistan's civil-military ties,  Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.

Related Links:

Haq's Musings

South Asia Investor Review

COVID19 in Pakistan: Test Positivity Rate and Deaths Declining

Naya Pakistan Housing Program

Construction Industry in Pakistan

Pakistan's Pharma Industry Among World's Fastest Growing

Pakistan to Become World's 6th Largest Cement Producer by 2030

Is Pakistan's Response to COVID19 Flawed?

Pakistan's Computer Services Exports Jump 26% Amid COVID19 Lockdown

Coronavirus, Lives and Livelihoods in Pakistan

Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis

Pakistani-American Woman Featured in Netflix Documentary "Pandemic"

Coronavirus Antibodies Testing in Pakistan

Can Pakistan Effectively Respond to Coronavirus Outbreak? 

How Grim is Pakistan's Social Sector Progress?

Pakistan Fares Marginally Better Than India On Disease Burdens

Trump Picks Muslim-American to Lead Vaccine Effort

Democracy vs Dictatorship in Pakistan

Pakistan Child Health Indicators

Pakistan's Balance of Payments Crisis

Panama Leaks in Pakistan

Conspiracy Theories About Pakistan Elections"

PTI Triumphs Over Corrupt Dynastic Political Parties

Strikingly Similar Narratives of Donald Trump and Nawaz Sharif

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel

PakAlumni Social Network


Anonymous said...

In 2018 Pakistan exported a total of $26.7B, making it the number 69 exporter in the world. During the last five reported years the exports of Pakistan have changed by -$1.73B from $28.4B in 2013 to $26.7B in 2018.

The most recent exports are led by House Linens ($3.5B), Rice ($1.98B), Non-Knit Men's Suits ($1.62B), Non-Retail Pure Cotton Yarn ($1.25B), and Heavy Pure Woven Cotton ($989M). The most common destination for the exports of Pakistan are United States ($3.52B), China ($1.95B), Germany ($1.78B), Afghanistan ($1.67B), and United Kingdom ($1.62B). Exports,-#permalink to section&text=During the last five reported,Pure Woven Cotton ($989M).

Saeed said...

Prices of every thing has been increased many folds. People r in real trouble. The increase in exports not helping to reduce unemployment

Riaz Haq said...

Saeed: "Prices of every thing has been increased many folds. People r in real trouble. The increase in exports not helping to reduce unemployment"

Flat exports, soaring imports, excessive #debt in PMLN years created yet another balance of payments crisis forcing yet another IMF bailout in Pakistan’s history. This inevitably led to massive currency devaluation, double digit inflation, slow growth

Ahmed said...

Dear Sir,

Thank you for sharing such informative and good news ,mashallah it is nice to see that Pakistan is heading in the right direction and we must pray for this.

Sir, how much has the foreign exchange reserves increased in Pakistan since PTI came into government?

I was having a debate with a friend,he said that the foreign exchange reserves of Pakistan are only US$ 19 billion.Do you really think this is enough?


samir sardana said...

Pakistan has demonstrated the resilience of its supply chain and manufacturing excellence. Manufacturing is OBSOLETE,in the EU.

The biggest risk to the global supply chains,is NOT WAR.A N-war will be in a over in a week, at the maximum and may not impact,the global supply chain - even in those 7 days.

The Risk to the global supply chain is Pandemics - and there is a progression,on the way. The prime target of the epidemics,will be in Northern Hemisphere and East Asia,and Parts of Africa.

EU and American will have to relocate their manufacturing and supply chain,from their nations,to derisk the epidemic and business ris.

If you look at all the nations in the world,with a population of 100 million or more,only 3 nations have a lower COVID rate per capita of population.They are Japan,Ethiopia and PRC.None of the 3 nations can compete with Pakistan on manufacturing cost,and Japan and Ethiopia,have supply chain risks - in pandemics and war.

Therefore,there is no competition for Pakistan,in the COVID scenario.

The way ahead for the EU and US companies,is to make in Pakistan,and export duty free to USA and EU (as a part of LDC benefits) and the US/EU companies are to focus on branding, marketing and research in the US/EU.

That is the future.dindooohindoo

Pakistan has to form a manufacturing quad of Pakistan,PRC,Turkey and Africa - with fungible capacities - financed and researched by China,staffed by Pakistan,Manufactured by Pakistan and Africa and Marketed by Turkey and Pakistan.

The chance of a pandemic striking all the coordinates of the quad is NIL.Disruptions in Malacca and South China Sea and the Persian Gulf,will have no impact on the Pakistani supply chain (although it may impact the African supply chain)

Since it is a super profit business,there will be no funding constraints.US and EU VCs and PE funds will fund the businesses and cash out on the KSE.

Once the US/EU companies come into Pakistan,the same or other investors,will look at investing for the domestic market of Pakistan.and other export markets.

That is the Osmotic effect of Pandemic induced manufacturing locations.

samir sardana said...

2 Things more for Pakistan to do in this Pandemic

Build the soft infrastructure - as in,Hospitals and Health care centres,School and Colleges and Mass Low Cost Housing AND extend the cotton value chain to obviate the Cotton exports,as far as possible.

Investments in Hospitals and Health care centres,will insulate the Pakistani people from pandemics,and can also bring in medical tourism,,rom the GCC and North Africa.

If any Arab lands in India for medical tourism - he might be better off in Pakistan.Indian Doctors are experts in Gau Mutram,Gajah Mutram and Gadha Mutram - like the Hindoo Trinity ! dindooohindoo

Education is key to keep the pipeline of supply of workers to industry,always choked - so that there is a supply pressure,and wages rise is checked,and Pakistan retains its cost efficiency.As time passes,the benefits of lower oil prices on IPP tarriffs,will transfer to industry.

Mass Low cost Housing at say 1750 USD house financed on 20 year loans from WB/IMF/OECF loans,with a 9-15 USD per month EMI is the solution to poverty.1 member of the family of the owner of the house has to be GUARANTEED employment on a daily or monthly basis,to pay off the EMI.

Then we come to Cotton.With LDC benefits,Low wages,Nil Labour regulations,SEZs,Minimal lock in for Capital and Dividend Repatriation and Levelised power tarriff at par with ASEAN,and a fiscal levy which is lower than any ASEAN nation - there is no reason for the Cotton value chain NOT to relocate to Pakistan.It will also yield higher returns for farmers.

There is a pipeline of pendemics coming - human and THEN,plant based.Pakistan has the right location,the right DNA and genes of its population,optimal interbreeding of races and the RIGHT SIZE of the population.

Riaz Haq said...

#Hemp’s moment is within reach as respected alternative to #cotton in #Pakistan-made fabric & apparel . It provides a greater yield for farmers, reduces amount of water needed to grow, and it offers the wearer UV protection & natural antimicrobial benefits

Panelists at a Kingpins24 panel on Thursday theorized why it’s taken so long for the fiber to catch on throughout the industry—and much of it boils down to legalities.

“Different countries have different rules and regulations,” said Zishan Ahmed, deputy general manager, product development, Naveena Denim. “In Pakistan, our government has approved some legislation on it, so ultimately we will have a bigger crop size in the coming days.”

The Pakistan government recently announced plans to allow the industrial production of hemp, which will initially be controlled by the government and eventually open up to private businesses and farmers. According to the Jakarta Post, Pakistan’s science and technology minister Fawad Chaudhry estimated the legislation could provide the country with $1 billion over the course of the next three years.

And many could benefit from hemp-based products. Experts explained that the fiber has a number of benefits on both the consumer and the supply chain sides: It provides a greater yield for farmers and reduces the amount of water needed to grow, and it offers the wearer UV protection and natural antimicrobial benefits.

But one of the greatest benefits according to Junaid Safdar, R&D director of Siddiqsons, is that it would lessen the industry’s dependency on cotton.

“We need an alternate solution to cotton right now because water reserves are decreasing everywhere around the world, and cotton’s yield is not so great,” he said. “Hemp has a very good yield compared to cotton, and it has all of its same features.”

He noted that advancements in cottonized hemp have made the fibers comparable in nearly every aspect, with hemp leading the charge in benefits.

Johan Van den Heede, marketing director of Raymond Uco, added that its ability to blend with organic fibers is a key advantage that can take the material from summer to winter.

“Playing with the construction and with the blends, you can make beautiful products out of hemp,” he said. “It’s a bit more authentic—it gives you a more rustic feeling.”

Despite hemp’s benefits, it will take a while for the industry to drive down the cost and make it more accessible to the consumer. According to Safdar, it all boils down to supply and demand.

“Technically it should be cheaper, but it’s just a matter of time because of the demand supply,” he said. “It’s still very early stage. I think that as the time passes, it will eventually become the same price as cotton or maybe even cheaper.”

Riaz Haq said...

Denim Mills Play Up Offerings with Comfort and Antimicrobial Properties
Long before the COVID-19 pandemic forced the world into isolation, consumers were clamoring for denim that was sustainable, comfortable and antimicrobial. Now, those needs have been underscored, as people are spending more time inside and prioritizing quality over quantity.
Denim mills have created innovative fabrics that embody all of these properties. In separate presentations at the Kingpins24 online event, Artistic Milliners and US Denim highlighted some of their featured fabrics.

Artistic Milliners presented its Bio Vision 2.0 collection that is based on guidelines set by the Ellen MacArthur Foundation’s Jeans Redesign, featuring biodegradable fibers that provide optimal recovery. The mill’s circular focus is also displayed in its Circular Blue New collection, which is made of 100 percent recycled cotton and uses post-consumer, pre-consumer and industrial waste.

US Denim’s latest collections also focus on sustainability and feature recycled and biodegradable fibers. Its Reborn product is “sustainable from every angle” and uses recycled cotton, elastane and polyester; aniline-free dyestuff; and water-safe dyeing methods.

The Pakistan-based fabric mill also highlighted its use of cottonized hemp, which checks off multiple boxes for consumers, as the fiber is both sustainable and naturally antimicrobial. Its IntelliJeans collection features hemp sourced from China that is free of pesticides and uses 86 percent less water than conventional products.

Artistic Milliners offers a similar take on antimicrobial denim with its hemp-based Buttery Soft 2.0 collection. Made with water-saving dyeing techniques, denim in this collection provides the comfort of sweatpants with the look of an authentic jean. And while most jeans lose their softness over time, this denim was specially designed to get softer with every wash.

Riaz Haq said...

Hemp Clothing Is Happening, and No, It Won’t Get You High
Once sullied by its associations with seedy drug culture, the irreproachable hemp plant is gaining ground in summer fabrics that rival wrinkly linen

MORE THAN JUST A WEED Hemp Jacket, $129,; Glanshirt Shirt, $355,; Hemp Pants, $406,; Boots, $130,

More Than Just A Weed Hemp Jacket, $129, Patagonia.Com; Glanshirt Shirt, $355, Slowear.Com; Hemp Pants, $406, Phipps.International; Boots, $130, Clarksusa.Com.
LAST YEAR Senate Majority Leader Mitch McConnell signed his name on the 2018 Farm Bill using a pen made of hemp. Among other initiatives, the bill removed hemp from the Controlled Substances list, where it had languished since 1970. To address the elephant in the article: Hemp is not marijuana, its THC-potent sibling. It’s a perfectly respectable (read: non-high inducing) plant that produces fibers for textiles, plastics, paper and a host of other products. The passing of the Farm Bill is the surest sign yet that hemp has shed its headshop connotations and entered the mainstream. Included in that transformation is its legitimacy as a valid, even desirable, fabric for modern clothing.

According to many designers and fans, hemp is an eco-friendly alternative to cotton, requiring less water to produce and regenerating at a far more rapid rate. It is also a suitable summer-weight substitute for wrinkle-prone linen. “Everyone walks up to it and is like, ‘Oh my God, this is linen,’” said Ally Ferguson, the owner of Seeker, a 2-year-old hemp-based label in Los Angeles. Her brand’s lightweight trousers and jackets (made from imported hemp) have a clean, almost Scandinavian aesthetic, one that calls to mind a minimal urban coffee shop, not Woodstock. “When people look at it they’re like, ‘It’s not really hippie or crunchy. That’s super clean and I want to wear that.’”

‘As evidenced by its nautical uses, hemp is impressively durable.’
As evidenced by its nautical uses since at least the Viking era, hemp is impressively durable. Companies like Patagonia and Levi’s are exploiting this quality by fashioning the material into hardy work trousers and jeans. “It was the original sail cloth, so it’s really resistant to ripping and pulling,” said Antonio Ciongoli, the designer of 18 East, a New York label that made all of its lightweight summer sweaters from Italian hemp this year. He also focused on hemp because it doesn’t crumple like linen, the more common choice for an airy knit. “The fibers are really strong,” noted Mr. Ciongoli. You can stuff a hemp sweater in your suitcase or wear it on a hot day without being subjected to unsightly puckering.

Though it has clear aesthetic and ecological advantages, hemp fiber is not readily available on a large scale here in America. Jeffrey Silberman, a professor and chairperson of textile development at the Fashion Institute of Technology in New York, stated that it takes a specific type of processing equipment to turn hemp into a fiber, and that type of machinery is still scarce. “New York state doesn’t have the processing equipment for it, at least as far as I can tell. I haven’t found a spinning mill that can handle hemp,” he said. Nonetheless, universities in New York and North Carolina are working on America’s hemp development, and Mr. Silberman predicts that hemp’s rehabbed reputation will make it a closet staple soon enough. “It’s not scratchy anymore and it’s not based on a five pointed leaf,” he said. “It’s based on its being a real fiber that can make a real fabric.”

Riaz Haq said...

#Car sales in #Pakistan rose 25% to 11,997 units in October 2020, from 9,566 units in October 2019. Sales of #motorcycles and 3-wheelers jumped from 156,872 units in Oct 2019 to 175,294 units in Oct 2020, up 11.7%. #AutomotiveIndustry #manufacturing #LSM

Car sales in Pakistan rose 25 per cent to 11,997 units in October 2020, as against the sale of 9,566 units in October 2019, according to data released by the Pakistan Automotive Manufacturing Association (PAMA) on Wednesday.

Cumulatively, the sale of cars increased 8pc YoY to 43,865 units during the first four months (July-Oct) of the current fiscal year (2020-21), as against 40,583 units in same period of last year.

As per the data, the sale of Honda cars (Civic and City) increased sharply by 80pc, from 1,032 units in October 2019 to 1,858 units. The sale of Toyota Corolla, however, registered a decrease of 33pc, from 1,982 units to 1,314 units in Oct 2020.

During the month under review, the sale of Suzuki Swift increased 19pc to 180 units (151 units in Oct 2019), while that of Suzuki Wagon-R surged 70pc to 1,198 units (530 units in Oct last year).

On the other hand, the sale of Suzuki Alto plummeted to 2,893 units in Oct 2020 from 4,048 units last year, showing a decline of 48.5pc. The sale of Suzuki Cultus also declined by 30pc to 816 units in Oct 2020 from 1,179 units in Oct last year.

The newly launched Toyota Yaris witnessed a sale of 3,058 units in Oct 2020 as compared to the sale of 2,421 units in September 2020, showing an increase of 26.3pc on a monthly basis.

Meanwhile, the sale of motorcycles and three-wheelers jumped from 156,872 units in Oct 2019 to 175,294 units in Oct 2020, showing a rise of 11.7pc.

Riaz Haq said...

#Pakistan #textile hub #Faisalabad to utilise all 80,000 power looms. “Pakistan has seen orders shifting from multiple nations including #China , #India & #Bangladesh ..#Garment manufacturers are operating near maximum capacity” unable to take more orders

Faisalabad is currently experiencing a financial boom with the operationalisation of 50,000 power looms and expecting the opening of another 30,000 units.

Known as the country’s textile hub, Faisalabad, for the first time after 1990, has seen a massive economic growth following a high demand of export items and the government’s recently announced incentive of supplying electricity to the industrial sector at reduced rates.

In this regard, Prime Minister (PM) Imran Khan in a tweet on Thursday shared a television news report about the increased economic activity in Faisalabad and the resultant shortage of 0.2 million labourers required to meet the high demand of orders in the textile sector.

Factories and power looms faced closures owing to a power crisis as emerged due to the apathy of previous governments in the recent past. However, during the coronavirus situation, orders in the textile sector were diverted towards Pakistan from various countries.

The news report mentioned that Faisalabad had 1.3 million workers with one million natives and 0.3 million belonging to other districts.

Bloomberg in its recent report ‘Opening early helped Pakistan boost exports during pandemic’ also mentioned a surge in Pakistan’s textile exports.

“Pakistan has seen orders shifting from multiple nations including China, India and Bangladesh,” All Pakistan Textile Mills Association (APTMA) Secretary General Shahid Sattar said, as quoted by Bloomberg.

“Garment manufacturers are operating near maximum capacity and many can’t take any orders for the next six months,” he added.

Further, Pakistan’s decision to loosen pandemic restrictions early has helped the nation’s exports emerge stronger than its South Asian peers.

Bloomberg said that Pakistan’s outbound shipments grew at a faster pace than Bangladesh and India as textiles, which account for half of the total export.

“Islamabad saw total shipments grow 7pc in September, compared with New Delhi’s 6pc and Dhaka’s 3.5pc,” it said.

Riaz Haq said...

Recent data suggest a further strengthening and broadening of the recovery observed since July, led by construction and manufacturing. Sales of Fast Moving Consumer Goods (FMCGs) rebounded in FY21 Q1, average sales volumes of POL and automobiles have surpassed their pre-Covid levels of FY20, and cement sales are at an all-time high.

Large scale manufacturing (LSM) continues to rebound, expanding by 4.8 percent (y/y) in FY21 Q1, against a contraction of 5.5 percent in the same quarter last year. Nine out of fifteen major manufacturing sectors have shown gains, including textiles, food and beverages, petroleum products, paper and board, pharmaceuticals, chemicals, cement, fertilizer, and rubber products. The MPC noted that the recovery was being supported by stimulus provided by the government, the round of policy rate cuts and the SBP’s timely measures to mitigate the impact of the COVID pandemic.

These measures included principal extension and loan restructuring, payroll financing, and Temporary Economic Refinance Facility (TERF) which injected liquidity, reduced layoffs and provided incentives for investment. In agriculture, the impact of the expected decline in cotton production is likely to be offset by growth in other major crops and higher wheat production due to the rise in support prices and recently announced subsidies on fertilizers and pesticides. While social distancing continues to weigh more heavily on certain parts of the services sector, wholesale and retail trade and transportation are expected to benefit from the knock-on impacts of the ongoing pick-up in construction, manufacturing and agriculture.

External sector

The external sector continues to strengthen, with the current account in FY 21 Q1 recording the first quarterly surplus in more than five years. After remaining in positive territory for all four months of this fiscal year, the cumulative current account through October reached a surplus of $1.2 billion against a deficit of $1.4 billion in the same period last year. This turnaround was supported by an improvement in the trade balance and record remittances.

As per SBP, exports have recovered to their pre-COVID monthly level of around $2 billion in September and October, with the strongest recovery in textiles, rice, cement, chemicals, and pharmaceuticals.

Remittances recorded strong growth of 26.5 percent (y/y) during July-October, primarily due to orderly exchange rate conditions, supportive policy measures taken by the government and SBP, travel restrictions, and increased use of formal channels. Meanwhile, subdued domestic demand and low global oil prices have kept imports in check.

The sizable current account surplus and improving outlook and sentiment for the economy have supported a 3½ percent appreciation in the PKR since the last MPC and further strengthened external buffers, with SBP’s foreign exchange reserves increasing to $12.9 billion, their highest level since February 2018.

Based on the performance to date, the outlook for the external sector has improved further and the current account deficit for FY21 is now projected to be below 2 percent of GDP.

Fiscal sector

In line with this year’s budget, the government continues to make concerted efforts to maintain fiscal discipline, including adhering to its commitment of no fresh borrowing from SBP. Despite lower non-tax revenue, the primary balance posted a surplus of 0.6 percent of GDP in FY21 Q1, similar to the levels achieved during the same period last year. However, the higher overall budget deficit due to larger domestic interest payments should taper as the benefits of recent interest rate cuts filter through. PSDP-releases, which are an important stimulant of economic activity, recorded an increase of 12.8 percent (y/y) during the first four months of this year.

Riaz Haq said...

#Pakistan #exports jump 7.67%to $2.161bn in Nov. Growth in home #textiles (20%), #pharma (20%), rice (14%), surgical goods (11%), stockings & socks (41%), jerseys & pullovers (21%), women’s #garments (11%)and men’s garments (4.3%)- DAWN.COM

Pakistan’s exports grew for the third consecutive month in November to $2.161 billion, up 7.67 per cent from $2.007bn in the corresponding month last year, data released by the Pakistan Bureau of Statistics showed on Friday.

The increase in exports is mainly driven by double-digit growth in proceeds from textile and non-textile commodities. Meanwhile, during the month under review, imports also increased 7pc leading to a slight increase in trade deficit.

Data showed a significant growth has been seen in the exports of home textiles (20pc), pharmaceutical products (20pc), rice (14pc), surgical goods (11pc), stockings & socks (41pc), jerseys & pullovers (21pc), women’s garments (11pc) and men’s garments (4.3pc), as compared to Nov 2019.

Between July to November, exports slightly increased by 2.11pc to $9.737bn, from $9.536bn over the corresponding months of last year.


Exports in the new fiscal year started on a positive note but witnessed a steep decline of 19pc in August before rebounding in September, October, and November.

To promote exports of textile products, the Ministry of Commerce on Friday released Rs1.78bn for the textiles sector under Drawback of Local Taxes and Levies (DLTL) scheme. “I hope this will resolve the liquidity issues of our exporters and enable them to enhance exports”, said Adviser to PM on Commerce and Textile Razak Dawood.

He said the DLTL for non-textile sector are also being released shortly. Razak also disclosed that the export of animal casings from Pakistan to Japan has resumed after a ban of four years. “I commend the efforts made by our trade section in Tokyo. I advise our trade missions to actively engage with importers,” he said.

“I urge exporters to take benefit of this opportunity and move full speed ahead”, the adviser added.

In FY20, exports fell by 6.83pc or $1.57bn to $21.4bn, compared to $22.97bn the previous year. Data shows visible improvements in export orders from international buyers, mainly in the textile and clothing sectors since May.

On the other hand, imports also rose by 7.77pc in November to $4.229bn, as against $3.924bn over the corresponding month of last year. During 5MFY20, the overall import bill slightly increased by 1.29pc to $19.422bn, up from $19.175bn over the corresponding months of last year.

The continuous decline in imports has provided some breathing space to the government in managing external accounts despite a downward trend in exports. However, imports are now expected to increase further in the coming months following the abolishment of regulatory duty on imports of raw materials and semi-finished products.

In FY20, the import bill witnessed a steep decline of $10.29bn or 18.78pc to $44.509bn, compared to $54.799bn in the previous year.

The country’s trade deficit also went up by 7.88pc in November, mainly due to a growth in imports proceeds. In absolute terms, the trade gap stood at $2.068bn, as compared to $1.917bn over the corresponding month of last year.

In the first five months, the trade deficit edged up 0.48pc to $9.685bn, as against $9.639bn over the last year. During FY20, it narrowed to $23.099bn, from $31.820bn.

Riaz Haq said...

#Pakistan's knitwear and hosiery #exports climb 13% in first 4 months of current fiscal year as mills return to full capacity. #economy #COVID19 #pandemic via @EMAILiT

Riaz Haq said...

The country’s big industries grew at a pace of 5.5% in the first four months of current fiscal year, which is in line with government’s expectations of economic recovery but the index still stands below pre-coronavirus outbreak levels.

The Large-Scale Manufacturing (LSM) sector registered a cumulative growth of 5.5% in July-October of current fiscal year, reported the Pakistan Bureau of Statistics (PBS) on Tuesday.

October was the second successive month when the index grew over the previous month, raising hopes that the momentum could continue in the midst of the second wave of Covid-19 in Pakistan.

Out of 15 major industries, nine sectors again recorded a surge in production while output of six industries contracted in the first four months of current fiscal year compared to the same period of previous year, according to the PBS.

The government expects 2.5% contraction in the LSM sector in the current fiscal year, according to the Annual Plan 2020-21 released by the Ministry of Planning and Development on the eve of federal budget. But the Ministry of Finance’s estimates suggest that instead of contraction, the LSM sector may grow 1.4% in the fiscal year.

Because of better-than-expected output in the industrial and agriculture sectors, the Ministry of Finance now expects economic growth to remain in the range of 2.6% to 2.8% in the current fiscal year - better than the official target of 2.1%. The industrial sector, which was earlier projected to grow only 0.1% by the government, may now grow at a rate of 2.1%.

LSM recorded 6.7% year-on-year growth in October but the index was still below pre-coronavirus level of 160.2 points recorded in March this year.

On a yearly basis, the petroleum sector contracted 0.1% in October over the same month of previous year. Provincial bureaus also reported a nominal growth of less than 1% in 11 industries. On a month-on-month basis, the LSM sector showed 3.4% growth in October over September.

Prime Minister Imran Khan won the July 2018 elections on the promise of creating 10 million jobs and constructing five million homes at affordable prices but the promises have remain unfulfilled so far. With the current sluggish economic growth, there will be increase in poverty and unemployment in the remaining tenure of the government.

Pakistan needs 6-7% annual economic growth to reduce poverty and unemployment, according to independent economic experts.

Data collected by the Oil Companies Advisory Committee (OCAC) showed that 11 types of industries registered an average growth of just 0.1% in the first four months of current fiscal year.

The Ministry of Industries, which monitors 15 industries, reported 3.7% growth in the LSM output. Provincial bureaus reported a growth of 1.6% in 11 industries in four months, according to the PBS.

Sectors that posted growth during the July-October period included textile that grew 2.2% and non-metallic mineral products that soared 22.9%.

However, the output of power looms slumped 41.7% in four months, contrary to the media hype generated about utilisation of power looms at full capacity.

The fertiliser sector grew 6% whereas the food, beverages and tobacco group expanded 12.2% in the four-month period under review.

The manufacturing of chemical products increased 9.2%, paper and board 10.4% and rubber products 3.3%. The pharmaceutical sector registered a growth of 13.5% in the July-October period. Output of the coke and petroleum sector increased 1.6%.

Industries that registered a dip in manufacturing included the automobile sector, which saw a contraction of 1.6% but the pace of negative growth slowed down.

Iron and steel production fell 5.4%, electronics 23%, leather products 43%, engineering products 34% and wood products 64% during the July-October period.

Riaz Haq said...

#Pakistan #Textile #exports rise 4.88% year-on-year to $6.04 billion between July to November FY21 compared to $5.76 billion in the same period last year. In November, export proceeds were up by 9.27% from a year ago. #economy #Covid_19

In November, export proceeds were up by 9.27pc from a year ago. In October, export proceeds were up by 6.18pc and in September, they grew by 11.03pc while a decline of 15pc was recorded in August.

In the first month of the current fiscal year, exports recorded a robust increase of 14.4pc on a year-on-year basis. The rebound in exports of textile and clothing is the outcome of a series of incentives to support exporters to meet the challenges in the wake of the pandemic and disruption in supplies.

The demand for country’s exports had collapsed in months following March due to the Covid-19 pandemic, while there has been a gradual improvement since June from international buyers.

Adviser to PM on Commerce in a tweet said that in November, the exports of cotton yarn declined by 25pc, raw leather by 21pc, and cotton fabric by 12.2pc. “This is an indication that exports of low value-added products are decreasing and we are moving towards more value-added exports”, he said while adding that “I urge our exporters to keep pursuing this policy.”

The PBS data showed that ready-made garment exports edged up by 4.36pc in value while plunging in quantity by 44.64pc during July to November this year from a year ago. Exports of knitwear increased by 14.34pc in value and 32.35pc in quantity; bedwear exports were up 12.28pc while dipped 7.95pc in quantity.

Towel exports went up 14.24pc in value and 3.79pc in quantity, whereas those of cotton cloth dipped 8.73pc and 31.78pc in quantity.

Among primary commodities, cotton yarn exports plunged by 37.34pc, yarn other than cotton by 16.69pc, made-up articles — excluding towels — was up 15.53pc and tents, canvas and tarpaulin increased by a massive 58.05pc during the months under review.

Textile machinery imports dropped by 6.07pc during the first five months of current fiscal year — a sign that no expansion or modernisation projects were taken up by the industry in the given period.

Petroleum imports declined 22.78pc in the first five months (July-November) to $3.94bn, compared to $5.11bn over the last year, the PBS data showed.

Of these, petroleum product imports were down 16.51pc in value in the first five months’ despite increasing by 54.42pc in quantity. Similarly, import of crude oil dipped 27.01pc in value, but posted a growth of 14.78pc in quantity during the period under review while those of liquefied natural gas fell by 34.73pc in value. On the other hand, liquefied petroleum gas (LPG) imports jumped 52.06pc in value in July-Nov, largely to plug a shortfall in local production.

Machinery imports went down 5.78pc to $3.37bn in the first five months from $3.58bn last year. The decline in imports was recorded in almost all kinds of machinery except power generating machinery, office machinery and mobile phones.

The power generating machinery imports went up 21.73pc in the first five months mainly due to revival of power projects under the China-Pakistan Economic Corridor and office machinery increased by 0.7pc during the months under review.

In the telecommunication sector, imports surged by 31.32pc on the back of mobile handsets arrivals which were up by 45.26pc. This was the result of a crackdown on smuggling and doing away with free imports in baggage schemes. Import of other apparatus fell by 6.39pc.

The overall transport group witnessed a growth of 13.92pc. This growth was mainly driven by an increase in imports of road motor vehicles (build unit, CKD/SKD) and CBU during the months under review.

An increase of 60.36pc was seen in imports of textile group — raw cotton, synthetic and artificial silk yarn.

Riaz Haq said...

PM Imran lauds ‘remarkable turnaround’ in Pakistan’s economy

Prime Minister Imran Khan on Tuesday said the country's foreign reserves have risen to around $13 billion, the highest in three years.

The premier said that despite the Covid-19 pandemic, which brought a global slowdown in economic activity in 2020, there is "great news on the economy" and a "remarkable turnaround".

Pakistan has achieved a current account surplus of $447 million for the month of November, added the prime minister. He further said there is a surplus of $1.6 billion for the fiscal year so far versus a deficit of $1.7 billion during the same period last year.

Earlier this month, the premier attributed the positive trends in the country’s economy – improvement in stock market performance and increase in investors’ confidence – to the business-friendly policies of the PTI led federal government.

The Asian Development Bank (ADB) has said that Pakistan’s economy was on the path of recovery. Some official estimates suggested 2.8% growth rate during the current fiscal year.

“Pakistan’s growth is forecast to recover in fiscal year 2020-21 as economic sentiment improves with the expected subsiding of Covid-19 and the resumption of structural reform,” said the ADB.

The country's remittances have also continued to increase over the past months. Cumulatively, in the first five months (July-November) of current fiscal year, remittances grew 27% to $11.77 billion compared to the same period of last year.

Pakistan had received remittances in the range of $1.78-1.9 billion per month in the prior five months - January-May 2020.

Riaz Haq said...

#Pakistan to approve new #textile policy to raise #exports to $21 billion. Pak textile exports reached $6 billion in the first 5 months of current fiscal year (July-November 2020) almost 5% higher than last year while total exports reached $9.7 billion.

Pakistan’s top economic decision-making body, the Economic Coordination Committee (ECC), is expected to approve a new five-year textile policy this week, with incentives worth more than Rs900 billion ($5.6 billion) for the industry and an aim to increase exports to $21 billion in five years, officials have said.
Textiles make up more than half of Pakistan’s exports, but have lost ground to South Asian neighbors in recent years, hurt by chronic energy shortages and underinvestment in machinery.
But this year, after Pakistan lifted its comprehensive coronavirus lockdown in May while other countries in the neighborhood kept their economies closed, international textile orders have been diverted to Pakistan, leading to a nine-year record in exports. The South Asian nation has now drafted a new policy to augment the gains, officials say.
“The textile policy has already been approved by the prime minister, which will be presented in the ECC next week,” Aliya Hamza Malik, parliamentary secretary for commerce, told Arab News. “After ECC approval, the policy would be a pubic document,” she added, saying the government of the ruling Pakistan Tehreek-e-Insaf (PTI) party had granted Rs900 billion ($5.6 billion) in incentives to the textile sector in the new policy, the country’s third.
The textile industry, which comprises 46 percent of the total manufacturing sector and provides employment to around 25 million Pakistanis, contributes 8.5 percent to the GDP, according to the Pakistan Board of Investment. It also contributes 60 percent to overall exports and is one of the major earners of foreign exchange for Pakistan.
Despite a global economic slowdown due to COVID-19, Pakistan’s textile sector reached $6 billion exports in the first five months of current fiscal year (July-November 2020), which is 62 percent of total exports (worth $9.7 billion) and almost 5 percent higher compared to the same period last year, official data shows.
“Incentives and export facilitations have played a big role in making Pakistan a competitive exporting country,” Malik said.
The new measures aim to increase textile exports from $12.86 billion to $21 billion in the next five years, with a major focus on value addition, a draft of the policy seen by Arab News said. The document said electricity would be provided to the industry at the rate of US cents 7.5/kWh, RLNG at $6.5/MMBtu and system gas at Rs 786/MMBtu under the new policy.
The last two textile policies, for 2009-14 and 2014-19, had aimed to up exports to $25 billion and $26 billion respectively but the targets were not achieved. The third policy was approved in March this year but still awaits official announcement.