Pakistan’s textile exports, a key component of its foreign exchange earnings, took a significant hit in August, falling 6 percent year-on-year to $1.48 billion, according to industry data. .
This decline is due to high energy prices and lack of liquidity, which has eroded the sector’s competitiveness.
The All Pakistan Textile Mills Association (APTMA) reported that textile exports in the first eight months of calendar year 2023 saw a significant decline of 19 percent, totaling $10.58 billion, compared to 13 percent during the same period in 2022. Less than a billion dollars.
However, there was a glimmer of hope in August as textile exports improved by 13 percent on a month-on-month basis, recording $1.31 billion in July. July saw a year-on-year decline of 11.44 percent.
Aptama referred to the energy tariff.
Aptama has earlier attributed the decline in textile exports to various factors, including withdrawal from Regional Competitive Energy Tariff (RECT), high interest rate of 22 percent, end of zero rating facility for the sector, and delayed sales. Included. Tax refund.
Additionally, the implementation of Pakistan’s Textiles and Apparel Policy 2020-25, which aims to boost exports by providing a market-driven exchange rate, tariff rationalization, and stable energy supply at competitive rates, poses significant challenges. is facing
The Commerce Minister has a target of $25 billion.
Caretaker Federal Minister for Commerce, Industry and Production, Gohar Ijaz, who is also Patron-in-Chief of APTMA, has set an ambitious target of $25 billion for textile exports for the current financial year, up from $16 billion last year. The target has been exceeded. fiscal year.
In a broader economic context, Pakistan’s total exports showed signs of recovery in August, with the pace of decline slowing to single digits. Exports decreased by 4.8% compared to the same month last year but increased by 14.27% compared to the previous month. Imports also declined significantly by 25.8% year-on-year but increased by 21.16% month-on-month.
The trade deficit narrowed by 40.4 percent to $2.13 billion in August from $3.57 billion in the same month last year. July’s trade deficit stood at $1.64 billion.
In the first two months (July-August) of FY 2023-24, exports fell by 6.4 percent to $4.43 billion and imports by 24.75 percent to $8.2 billion compared to the same period last fiscal. During the same two months last year, exports were $4.73 billion and imports were $11.04 billion. During the two months, the trade deficit narrowed by 40.3 percent to $3.76 billion from $6.3 billion in the previous year.
