Exports to cross $26bn figure during upcoming fiscal year

ISLAMABAD: The exports from Pakistan are projected to reach at US$ 26,187 million in fiscal year 2019-20 from US$ 24,656 million estimated for the FY2018-19, official document revealed.

The Annual Plan (2019-20) envisages higher growth in exports sector in the backdrop of positive global outlook, improved domestic infrastructure, low cost energy supply to exports sector and competitiveness gained due to depreciation of the rupee.

On account of higher growth trajectory, imports are expected to marginally increase by 0.8 percent and reach the level of US$ 53,664 million in 2019-20 from an estimated total of US$ 53,248 million for 2018-19, implying trade deficit of US$ 27,476 million in 2019-20.

The higher expected increase in exports coupled with buoyant remittances and further improvement in balance on trade in services would help in curtailing the current account deficit.

The current account deficit has been projected to be contained at US$ 8,312 million (3% of GDP) during 2019-20 as against estimated deficit of US$ 13,179 million (4.7% of GDP) by the end of outgoing fiscal year.

Meanwhile, the Capital inflows are projected to decrease from estimated US$ 374 million in 2018-19 to US$ 350 million in 2019-20.

General government disbursements during 2019-20 are expected to remain at the level of US$ 10,493 million against US$ 8,240 million estimated for 2018-19 whereas amortization is projected at US$ 10,533 million for 2019-20 against US$ 7,007 million estimated for 2018-19.

Foreign direct investment (net) have been targeted at US$ 4,340 million for 2019-20 against estimated US$ 1,690 million by the end of 2018-19 .

In order to strengthen the external sector of the economy effective policy measures were planned to bolster exports, curbing unnecessary imports, enhancing remittances and FDI inflows, it added.

According to the plan, Strategic Trade Policy Framework (STPF) 2018-23 for enhancing the exports and Trade related investment Policy framework (TRIPF) to attract FDI in export-oriented sectors is being devised in synchronization with other policies so that targets become achievable.

Moreover, issues pertaining to trade licensing, dispute resolutions and advance taxes will be addressed.

For making the tariff structure a true reflection of trade policy priorities and removing anomalies in the tariff structure, which was causing distortions between sectors, draft National Tariff Policy (NTP) would be approved.

According to the plan, the real effective exchange rate (REER) remained overvalued during past few years, which eroded the competitiveness of country’s exports in international market. However, depreciation in Pak rupee since December 2017 resulted into positive impact on REER, it said adding, the flexible exchange rate regime will be followed during the plan period.

A more robust inflow of remittances is expected in the backdrop of incentives announced under Home Remittance Account (HRA) by State Bank of Pakistan (SBP), effective implementation of Pakistan Remittance initiative (PRI) scheme, labor market diversification measures and strict compliance of anti-money laundering (AML) laws/rules to comply with FATF by the government. Qatar has offered to provide 0.1 million jobs to Pakistani workers and negotiations are underway to finalize the agreement; once the agreement is materialized it will contribute further in enhancement of remittances.

The Ministry of Overseas Pakistanis & HRD will finalize National Emigration and Welfare Policy for Overseas Pakistanis. Committee for Skills Up-gradation and Overseas Employment Promotion will proactively assess manpower demand abroad in various sectors on regular basis and will arrange skilled manpower accordingly.