A quest for value-added exports

During the last fiscal year that ended on June 30, Pakistan’s exports (fob value) increased to $31.1 billion whereas imports consumed $53.2bn, leaving a trade deficit of $22.1bn, according to the latest balance of payments statement. Although this volume of deficit is lower compared to the deficit of $24.8bn recorded a year earlier, the country’s precarious external finance situation requires further reduction during this year to minimise the overall external financing gap that is projected to remain close to $20bn. That is possible only with a dramatic rise in export earnings. There is no room left for further containment of imports for two reasons: The targeted economic growth rate of 3.5pc set for this fiscal year cannot be achieved if imports are further curtailed, and the International Monetary Fund (IMF) is against such moves during the new three-year $7bn Extended Fund Facility. In fact, the IMF has asked Pakistani authorities to draw an export strategy that keeps this in mind and focuses on product diversification and value addition.