Pakistan witnessed vigorous exports and imports growth during 2003-04 coupled with a healthy increase in foreign exchange reserves. Notwithstanding an anticipated marginal decline in the flow of remittances along with a double-digit rise in imports, the current account balance continued its positive trajectory.
This was observed in the Economic Survey of Pakistan 2003-04 released here on Friday.
The increase in imports was the direct outcome of higher machinery purchases, thus giving credence to the argument of a resurgence in the manufacturing sector.
On the external front, a strong rebound in the global economy has firmed up demand for Pakistan's exportable goods.
The growth in the external sector of Pakistan gained further momentum during fiscal year 2003-04. This trend was broad-based and can be attributed to an improved macroeconomic environment within the country on the one hand and an acceleration in world economic growth on the other.
Exports are targeted to increase by 8.4 percent to $12.1 billion in 2003-04, indicating a net increase of $940 million over last year's export earnings of $11.160 billion. During July-April 2003-04 this number grew by 13.1 percent and stood at $10001.0 million as against $8846.3 million for the same period last year.
Some of the main factors contributing to export growth include higher unit values export, deeper penetration into the European and US markets, a sharp reduction in the refinance rate in accordance with the Export Finance Scheme and Particulars 2003-04* 2002-03
The export performance (July-April) reveals that the textile manufactures, covering 65.4 percent to total exports, registered a significant growth of 14.3 percent amounting to $6535.4 million. All major textile items with the exception of readymade garments and synthetic textiles increased by 9.9 percent.
Exports during the first ten months (July-April) of the current fiscal year increased by $1154.7 million in absolute terms over the previous year with the major contributors being textile sector ($818.2 million or 70.9 percent), other Exports ($300.0 million or 26.0 percent) and Other Manufactures ($49.0 million or .2 percent). primary commodities export has declined by $12.5 million leading to a drag of 1.1 percent on export earnings.
Apart from exports, imports are targeted to increase by 4.8 percent to $12.8 billion in 2003-04, indicating a net increase of $580 million over last year's import bill of $12.220 billion. During July-April, 2003-04 this figure grew by 19.0 percent and stood at $12012.4 million as against $10097.8 million during the same period last year.
Further analysis in the Economic Survey reveals that the Food Group components, which account for 7.2 percent of total imports, grew by 4.5 percent -- primarily on account of a combined increase of $78.8 million imports in palm oil and tea for domestic consumption.
Machinery, with a 23.5 percent share of total imports, was up by 22.5 percent to $2820.7 million, indicating a further pick-up in domestic economic activity.
Despite higher international POL prices, the imports under the Petroleum Group declined by 7.7 percent due to a substantial fall of 42.2 percent in the quantity of imports of Petroleum Products, thereby saving $208.0 million.
A continuing surge in POL output by local refineries, an increased use of gas in industries and electricity generation and lesser reliance on fuel oil-based thermal electricity owing to higher electricity generation through hydel helped Pakistan rely on lesser imports of POL products.
Like exports, Pakistan's imports are also highly concentrated in a few items namely machinery, petroleum & petroleum products, chemicals, transport equipment, edible oil, iron & steel, fertiliser and tea.
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