The recently-released trade numbers by Pakistan Bureau of Statistics show that the import bill is contained for now. Total imports for the seven months ending January 2014 were merely 0.48 percent higher over the comparable period of last year.
The credit for this performance goes mostly to the rather tamed global oil prices that helped result in a marginal decline (1.44%) in petroleum imports in the seven-month period. With oil prices likely to remain flat, Pakistan’s oil imports will likely remain flat for the full year—unless Russia goes back on its latest word of using force as the last resort.
Last week, Russian President Vladimir Putin said he would use force in Ukraine only as a “last resort”. Later, he said he did not want the growing political tension to derail economic cooperation with Russia’s “traditional partners”. These statements have prevented global oil price from rising phenomenally; in fact at the time of writing this note the prices had started nudging backwards to its pre-risk levels.
However, to give all the credit to the little changed fuel import bill would be incorrect. For instance, the transport group imports in January 2014 stood at $194 million, its highest level since June 2012; the 7-month numbers show that things are under control. PBS data shows that CBU motor car imports stood at $111 million in 7M FY14 compared to $229 in the year-ago period, thanks to lower age-limit allowed on imported cars.
Likewise, telecom imports are also tamed this fiscal year so far. PBS data shows that telecom imports dropped nearly 26 percent in 7M FY14, where imports of telecom apparatus saw a decline of 44 percent offset partially by 8 percent increase in mobile phone import.
However, if historical trends are any guide, mobile imports will remain subdued for the full year as data shows that the last 3-4 months of every fiscal year since FY10 usually see a drop in the monthly mobile imports vis-à-vis Jan-Feb levels.
The segment under which imports saw an increase was the machinery group. While total machinery imports in 7M FY14 rose only 5.6 percent year on year, a few categories within it saw notable increases.
The machinery group classified by PBS saw an import of $710 million in January, its highest level since March 2013. This was led by power generating machinery imports that stood at $199 million in January 2014, its highest monthly number since December 2011.
To put it in perspective, the number for power generating machinery imports in first and second quarters of FY14 stood at $181 million and $257 million, respectively. Similarly, while textile machinery stood at $47 million in January 2014, the 7-month comparison shows a jump of nearly 36 percent.
In a nut shell, the country is faring relatively better on the imports front in the fiscal year-to-date, where the increases in imports are in the ‘essential’ categories, like textile and power. How is the country doing on the export front so far? We shall explore that tomorrow in the same space.
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KEY MACHINERY GROUP IMPORTS
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7MFY14 7MFY13 Change
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Total 3583 3391 5.7%
Power generation 644 605 6.4%
Office including data processing equipment 116 154 -24.6%
Textile 303 223 35.8%
Construction and mining 155 91 69.6%
Electrical machinery & appratus 632 472 33.8%
Telecom 716 965 -25.9%
Mobile 375 347 8.1%
Other appratus 341 619 -44.9%
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Source: PBS
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