Advisor to the Prime Minister on Commerce, Textiles, Industry, Production and Investment, Razzak Dawood claimed at a press conference that the trade deficit declined by 2 billion dollars during the first seven months of the current fiscal year and attributed it to regulatory duties on furnace oil, and other luxury items (food and automobiles). The Pakistan Bureau of Statistics (PBS) website notes that imports declined from 34.2 billion dollars July-January 2018 to 32.49 billion dollars in the comparable period of 2019 showing a decline of 5.17 percent. The decline is much more dramatic when January 2018 is compared to January 2019 with imports declining from 5.57 billion dollars to 4.5 billion dollars - a decline of 19.14 percent.
Detailed supporting data on the PBS website for January 2019 has yet to be uploaded; however, the website notes that food imports declined from 521.6 million dollars in December 2017 to 498.8 million dollars in December 2018 - a decline of 22.8 million dollars. Palm oil imports accounted for the decline - from 171.5 million dollars in December 2017 to 144.9 million dollars in December 2018 - a decline of 26.6 million dollars. Machinery imports, considered to be a reflection of the bulk of the rise in imports from China under the China Pakistan Economic Corridor were 965.3 million dollars in December 2017 declining to 751.4 million dollars in December 2018 raising concerns that the decline in imports may reflect a decline in the pace of implementation of CPEC projects, considered to be the major engine of growth through foreign investment/loans to Pakistan - a view reiterated by the Prime Minister as well as members of his cabinet. Additionally, petroleum group imports rose from 1.19 billion dollars in December 2017 to 1.13 billion dollars in December 2018, however, others (furnace oil not shown separately and probably indicated under this head) showed zero imports in December 2017 and 135,000 dollars imports in November 2018 and again zero in December 2018.
Exports rose from 1.96 billion dollars in January 2018 to 2 billion dollars in January 2019 and from 12.9 billion dollars during July-January 2019 to 13.2 billion dollars in the comparable period of 2019. In this context, it is relevant to note that Dr Ishrat Husain, Advisor to the Prime Minister on Institutional Reforms and Austerity, reportedly stated that the rupee depreciation, estimated at around 35 percent, has not contributed to a phenomenal increase in exports as exporters' foreign clients demand enhanced rebate and thus the benefit of depreciation has not accrued to the exporters.
Detailed supporting data on the PBS website indicates that exports in December 2017 compared to December 2018 were as follows: (i) food group rose from 439.9 million dollars to 482.3 million dollars; (ii) textile group rose marginally from 1.131 billion dollars to 1.139 billion dollars with yarn exports declining from 107.8 million dollars to 75.76 million dollars due to a fall in the international price of yarn; however, State Bank of Pakistan data reflects a different scenario with cotton yarn exports rising from 605.4 million dollars during July-December 2018 to 686.5 million dollars during the comparable period of 2019; (iii) carpets worth 6.6 million dollars rose to 7.49 million dollars with sports goods declining from 26 million dollars to 23.9 million dollars; and (iv) leather declining from 54.5 million dollars to 42.8 million dollars.
The Cabinet was recently informed by PBS officials that during the first six months of Pakistan Muslim League-Nawaz government, prices of daily use commodities registered a 6.5 percent increase, whereas in the first six months of the PTI government only 1.4 percent increase was witnessed. Careful examination of December 2013 and January 2019 data uploaded on the PBS website and subsequent to queries put to PBS officials by Business Recorder seeking clarification on how this calculation was made, a question which was not answered, compels one to conclude that this claim is not backed by supporting data and is merely a reflection of the PBS officials currying favour with the PTI administration. One would therefore urge the economic team, including Razzak Dawood, to take cognizance of the data released by PBS - data that during the previous administration was constantly challenged by Business Recorder and independent economists and repeated requests for clarification were simply ignored by the Bureau.