Fast #import growth has overshadowed some very good news in #Pakistan. The latest release of disaggregated #trade data by @StateBank_Pak reveals that the first nine months of FY22 showed #record high #exports in real terms, since there's statistics.
Short 🧵👇 w/ more results.
1\ #exports grew by 24.8% in the first 9 months of FY22 w.r.t. same period of FY21, reaching 23.7 bn for goods and 5.2 bn for services.
4\ In #services the transformation continues, with telecom and business services #exports growing fast. #knowledge intensive #exports keep scaling up. Maintaining this momentum is crucial. Keeping access to #inputs, investing in #connectivity will be crucial.
5\ Challenge, from an #external sustainability point of view is that #imports have grown even faster, at 39.9% w.r.t. first 9 months of FY21.
9\9 Sustaining the growth of #exports will require being careful about the way #imports are contained. Resorting to #import#duty increases will most likely backfire as they will hurt #exports. After all, #import duties are #export taxes in disguise. \end.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
Today's my last day in #Pakistan. So I'll close with a thread on #trade trends. With @StateBank_Pak data recently released for 11 out of 12 months of FY23.
Here's a summary: 🧵👇
1) Exports declined in July-May FY23 by 9.4% relative to same period of FY22. Largest contraction for #goods. Services exports actually expanded by 3.4%.
Role of restrictions to import inputs may explain the difference.
2) By destination: #exports to the top 5 markets fell during July-May FY23 (vs FY24), including USA, China, UK, Germany and UAE.
#Pakistan is going thru a complex #macro situation. At its heart is one symptom: the #CAD. Because the CAD has been perennial, this long-standing symptom translated into large foreign liabilities. Short 🧵👇
a) The #CAD shows that #Pakistan has been consuming beyond what it produces. At its heart, there’s another perennial deficit: the fiscal deficit.
b) To fix the #CAD, compressing #imports is futile (e.g. with the flood levy). You need either to reduce the fiscal deficit, or increase private saving well beyond investment. 👇
In our latest #growth report for #Pakistan, we examined, among other themes, the role of #FDI in the country. How much #Pakistan attracts, how much it could attract, the impact on #productivity and on #jobs.
1) #FDI is a useful source of financing for #developing countries. It is stable, and typically associated w/ #export growth, #job creation and #productivity upgrading. Does that all of that apply to #FDI in #Pakistan? Let's see...
2) #Pakistan's #FDI inflows/GDP (in green below) have been historically low and declining.
We have now 3 months of disaggregated #trade data for FY23 in #Pakistan. Visible deceleration both on #exports and #imports. Some key elements in 🧵below:
#Exports grew in Jul-Sep 23 versus Jul-Sep 22 by 5.3%. Slightly faster growth in #goods than in #services.
This thread will show performance in #values. not #volumes. Keep in mind FY22 was extraordinary in terms of high #prices, both for #imports and #exports. 👇👇👇🧵
1\ #Exports reached record highs, both #goods and #services, increasing by 26.6 and 17.1% respectively w.r.t. FY21. Good export prices and a decent #export response played a role here.
2\ #Pakistan#export growth was generalized by main destination. Particularly noticeable are increases in shipments to #USA and to #China - the two largest destinations.