Trade deficit falls sharply by 38pc in July-August

[Musafir117]

LOL at patwaris like @Musafir117 that's why they say atleast read the article before mouthing off.

O Bhai I said Ghabrana nai hai
app tou ghabra gae, well, yaqeen karo aur ghabrao na

 

[Yaseen1]

there is no rise in employment and new products development until now so import of machinery and raw material is not properly utilized yet,if these indicators in the form of rise in employment of public and new products for exports are not seen in next few months then I think we should review what is happening with this machinery and imported raw material

Here is the extract of OP:

On the other hand, duty-free imports — machinery and raw materials — grew by 6.89pc to $3bn in July-August as against $2.9bn over the corresponding months last year. The growth comes on the back of government’s decision to exempt maximum raw materials from duty in the last budget and facilitate machinery-related imports to promote economic activities in the country.

Don't worry, we are working on that, last month its first time that we exported industrial products (water dispensers) to Europe and recently got order for exports of ACs to African countries.

These are totally new export lines. There is no point of importing high value items when your imports are not comparable as eventually you have to pay for the imports our of your export proceeds. So if they results in reduction of living standard then it should.

 

[Type59]

Since rupee has been weakened and trade barriers been raised are domestic producers replacing previously imported products? To me catering for local market would be more lucrative in the short term, then shipping abroad. Can any Pakistani resident confirm whether shops are replacing foreign goods with locally produced ones?


Thread should be in economic section.

 

[Code_Geass]

I would like to know what kind of imports have declined

Since rupee has been weakened and trade barriers been raised are domestic producers replacing previously imported products? To me catering for local market would be more lucrative in the short term, then shipping abroad. Can any Pakistani resident confirm whether shops are replacing foreign goods with locally produced ones?


Thread should be in economic section.

 

[Darth Vader]

Problem Lies with following Few things Pakistan as Country is importing to much things which can be easily created by local market.

Pakistan will always needs to import materials as no current can totally be free from exports pakistan lacks for few reason
1 No body trust Pakistani Local industry they cut corners charge higher price and still provide rubbish so people have no other option to trust Exports
2 No push from Gov to Banks so they invest in smaller business themselves which will generate revenue for them as well keep the economy rolling.
3 No option for smaller sellers to sell their products into international market. E.g Ebay on national level

Too Much Taxs on Tech whcih stops from young intrapreneurs to invest in IT

 

[RIP Pak LAW]

Cutting imports impact taxes return as well since govt used to earn good amount of revenue from imports...although trade deficit going down is a good thing but exports needs to pick up the pace as well... Govt is loosing taxes revenues by resticiting imports every month

 

[The Accountant]

there is no rise in employment and new products development until now so import of machinery and raw material is not properly utilized yet,if these indicators in the form of rise in employment of public and new products for exports are not seen in next few months then I think we should review what is happening with this machinery and imported raw material

It will not happen in a month as the recent increase in import is mainly on account of capacity utilization ... the plant and machinery imported will take time ... minimum period of an export order from order till delivery is 6 months now if we take and average of 1 year and also add 1 year foe installation and callibration of new plants then it will take from 1.5 to 2 years foe some significant change ...

 

[Yaseen1]

It will not happen in a month as the recent increase in import is mainly on account of capacity utilization ... the plant and machinery imported will take time ... minimum period of an export order from order till delivery is 6 months now if we take and average of 1 year and also add 1 year foe installation and callibration of new plants then it will take from 1.5 to 2 years foe some significant change ...

I think even if production of new products installation of plant and machinery starts its effect on job creation will start immediately before exports orders start to be delivered.Previous govt also gave same statistics that imports of new machinery and raw material has increased in their tenure but nothing happened that is why we should ensure that these claims by importers should be verified

 

[Pakistansdefender]

Poor efforts trade deficit reduction of 2.4 b in two months with no improvement in exports war footed efforts were expected which never done IK failing to come up with economic efforts committing same blunders the NS and Zardari did and same fate is destined in next election

You can only sale what you produce .
The biggest thing is garments.
And there is a huge increase in coming months. As many garments companies gets huge orders. First time you are getting export orders of tractor and even electrical products . Even eurpeon Union order 1 million units of water dispenser.
This is nothing but it is a start where you can export ac, washing machines and tractors and electrical to African countries .. This would open up the channels for further improvement .
Even you get order from Angola for ac...
You cannot produce things out of blue .
Many factories are in process more investment would come after the stabalization period that is going on.
And don't worry about 5 years.
Everyone do they work and go that all.
If they do good then they would be elected again if not then not .
What action they are taking is right though maybe very unpopular and previous governments don't have courage to take this decisions at the cost of their popularity.

Can you name the plants and machinery which is being imported. I don't really see much scope for exports from Pakistan without improvement in manufacturing technology like automobile, steel industry, consumer durables etc. These require deeper changes like Skilling people, development of technology, higher power generation etc.

Reducing imports to reduce trade deficit is only short term measure but reduces quality of life as well as reduces military strength in terms of reducing ability to make spare parts or use civilian items to defence needs.

If you read the article . It clearly mentions that the machinery exports are not taxed and have increased from the previous year . The machinery used in manufacturing sector which also shows that production would increase.

I think even if production of new products installation of plant and machinery starts its effect on job creation will start immediately before exports orders start to be delivered.Previous govt also gave same statistics that imports of new machinery and raw material has increased in their tenure but nothing happened that is why we should ensure that these claims by importers should be verified

As far as garments are concerned.
Activity at faisalabad shows a very different picture .
They are very very hopeful and full with orders to the brim . Anyways 4 to 6 months of this year show us more clear pic .

Besides the new us trip of commerce ministry and his asking for access in us market would be a huge boon. It is scheduled in October .
And new fta with Pakistan is also very good for us

 

[Kabira]

Cutting imports impact taxes return as well since govt used to earn good amount of revenue from imports...although trade deficit going down is a good thing but exports needs to pick up the pace as well... Govt is loosing taxes revenues by resticiting imports every month

This is true, imports were biggest part of taxes. This is why local taxes now are more important then ever.

 

[The Accountant]

I think even if production of new products installation of plant and machinery starts its effect on job creation will start immediately before exports orders start to be delivered.Previous govt also gave same statistics that imports of new machinery and raw material has increased in their tenure but nothing happened that is why we should ensure that these claims by importers should be verified

Job creation should start before significant increase in expoer hoever where government has focussed policies on increasing export there is a policy of reducing imports and reducing demand therefore local economic growth is slowing down which is effecting job creation ... at job market we might see the negative trend for next 6 months to a year specially due to high interest rates increase in tax base and political umcertainity ...

In short there is ni relief coming in shirt run hiwever things will improve fundamentally in medium term

 

[sparten]

I am impressed. Exports remain more or less the same in dollar terms, which considering the rupees deprecation means that volume of production has increased.

 

[Smarana Mitra]

I am impressed. Exports remain more or less the same in dollar terms, which considering the rupees deprecation means that volume of production has increased.

No, the exports are sold in international prices only. Pakistani traders will not unnecessarily lose profits by reducing the price in dollars. Whatever is the international price of the goods, that itself will be the price at which it is sold. At best, it can mean that Pakistani traders or factories got higher margins.

 

[sparten]

No, the exports are sold in international prices only. Pakistani traders will not unnecessarily lose profits by reducing the price in dollars. Whatever is the international price of the goods, that itself will be the price at which it is sold. At best, it can mean that Pakistani traders or factories got higher margins.

No. Exchange regulations mean that monies are received in PKR.

 

[Code_Geass]

Most of things we can export are expensive compared to others thus needs subsidy from govt.

No, the exports are sold in international prices only. Pakistani traders will not unnecessarily lose profits by reducing the price in dollars. Whatever is the international price of the goods, that itself will be the price at which it is sold. At best, it can mean that Pakistani traders or factories got higher margins.