Macro adjustment policies resulting in stronger growth in various sectors: finance ministry – Business

The Ministry of Finance said on Friday that the government's macro adjustment policies, such as monetary adjustment, exchange rate adjustments and cuts in development spending have begun to bear fruit, with stability and increasing visible strength in many sectors of the economy.

In a press release, the ministry said the current account deficit contracted significantly by 32.1 percent to $ 13,508 billion (4.8pc of GDP) during fiscal year 2019 compared to $ 19,897bn (6.3pc of GDP ) last year.

As a continuation of the trend, the current account deficit in July-August of fiscal year2020 decreased by 54.7 percent to $ 1,292 billion compared to $ 2.85 billion during the same period last year.

The ministry described the impact of government economic policies on three key sectors of the economy: exports, imports and remittances.

Exports grow marginally

According to the statement, Pakistan's exports during fiscal year 2019 were $ 22.979 billion compared to $ 23.212 billion during fiscal year 2018. The ministry attributed this 1pc decrease to a strong negative price effect that dominates the effect. Positive of the quantity.

During July-August of fiscal year 2020, exports increased by 2,779pc to $ 3,753 billion against $ 3,651 billion during the same period last year.

Textile exports, which constitute more than 60 percent of total exports, increased by 2.3 percent in value over the past year.

During the period under review, value-added exports increased due to growing demand and improved export competitiveness after the exchange rate adjustment, the ministry said.

Bedding with a 10.7{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} share of exports increased both in quantity and value by 20.4{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} and 1.2{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5}, respectively.

The food group, which has a 17.3 percent share in exports, increased its value by 17.3 percent, of which rice increased in quantity and value by 47.6 percent and 48.6 percent, respectively.

Imports fall significantly

Government stabilization efforts resulted in a 9.86pc decrease in imports in fiscal year 2019. Imports, which stood at $ 60.795 billion in fiscal year 2018, fell to $ 54.799 billion during fiscal year 2019 .

The same trend was observed during July-August of fiscal year 2020, with a decrease in imports from 21.41 percent to $ 7.677 billion against $ 9.769 billion in the same period last year.

In order to reduce the increase in imports, the government imposed up to 60pc of regulatory duties on 570 luxury and non-essential imported goods.

According to an analysis of merchandise import data cited by the ministry, the import of machinery, which has a 22.4{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} share in total imports, increased by 8.2{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5}.

"This means an impressive image ahead in terms of decreasing the situation of LSM (large-scale manufacturing)," the ministry said.

Imports of textile machinery, telecommunications machinery and electrical machinery increased by 17.3{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5}, 11.1{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} and 20.3{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5}, respectively. Imports of other types of machinery increased by 20.1pc.

The food group, which constitutes 9.1 percent of total imports, registered a decrease of 26.8 percent during July-August of fiscal year 2020.

According to the Ministry of Finance, minor and major crops of national agriculture have improved during the current fiscal year, which has reduced dependence on imported food.

Decrease of remittances

Following the initiatives taken by the government, workers' remittances increased by 9.7 percent to $ 21.846 billion during fiscal year 2019.

Remittances decreased during the first two months of fiscal year 2020. "However, the current foreign employment scenario will be useful to achieve the remittance target this year," said the ministry of finance.

According to employment statistics abroad, 373,000 people went abroad during the first eight months of 2019. By comparison, a total of 380,000 people registered as employees abroad throughout the year 2018. The increase will have a positive impact on Currency entries, said the ministry. .

The statement says that the Pakistan Remittance Initiative has intensified its efforts by launching campaigns in local and foreign media to encourage Pakistanis abroad to remit funds through legal means.