The Government of Pakistan recorded that even prior to Covid-19 outbreak, globalization in trade, finance, investment and migration was facing a number of headwinds, stimulated through geopolitical tensions over trade between US and China, Brexit vote for UK also rising polarization and social inequality. The pandemic has further exacerbated the prevailing trade relationships among nations. All the initiatives taken through the states to restrain the spread of virus like closure of borders, strict lockdowns and quarantines have distorted supply chains and weakened the demand of an interconnected economy. This has resulted in an overall decline in global output and trade during 2020. The experts, however, recorded that during worldwide financial crisis, worldwide output witnessed a contraction of 0.1 percent while the world trade plummeted by 10.4 percent. Continuous trade and technological tensions among leading countries had already muted the growth in the world trade volume from 3.9 percent in 2018 to 0.9 percent in 2019. Covid-19 related restrictions have exacerbated the situation and resulted in a sharp contraction in the trade volume (-8.5 percent) during 2020 because of falling global demand.
In the developing countries like Pakistan, analysis released by Pakistan Bureau of Statistics (PBS) that based on the provisional statistics of imports and exports showed that balance of trade in May, 2021 was recorded at (-)557,507 million in terms of Rupees and (-)3,637 million in US dollars. The Balance of trade statistics cumulative from July-May 2020-2021 were recorded (-)4,376,345 million in terms of Rupees and (-)27,463 million in US dollars. According to the provisional statistics compiled through PBS, exports from Pakistan during May, 2021 amounted to Rs. 256,115 million (provisional) as compared to Rs. 339,498 million (provisional) in April, 2021 and Rs. 223,512 million during May, 2020 explaining a decline of 24.56 percent over April, 2021 but a rise of 14.59 percent over May, 2020. In terms of US dollars the exports in May, 2021 were recorded $ 1,671 million (provisional) as against to $ 2,218 million (provisional) in April, 2021 explaining a decline of 24.66 percent but increased by 19.70 percent as against to $ 1,396 million in May 2020. It is also showed that exports during July-May 2020-21 totaled Rs. 3,615,857 million (provisional) as compared to Rs. 3,105,799 million during the same period of last year showing an increase of 16.42 percent. In terms of US dollars the exports during July-May 2020-21 totaled $ 22,576 million (provisional) as compared to $ 19,795 million during the same period of last year showing a rise of 14.05 percent. PBS also showed that main commodities of exports during May, 2021 were recorded knitwear (Rs. 44,936 million), readymade garments (Rs. 29,864 million), bedwear (Rs. 27,746 million), cotton cloth (Rs. 20,641 million), cotton yarn (Rs. 11,050 million), rice others (Rs. 10,001 million), towels (Rs.9,473 million), madeup articles (excl. towels & bedwear) (Rs.7,460 million), Basmati rice (Rs. 6,264 million) and fish & fish preparations (Rs. 4,766 million). On the other hand, imports into Pakistan during May, 2021 amounted to Rs. 813,622 million (provisional) as compare to Rs. 802,443 million (provisional) in April, 2021 and Rs. 457,399 million during May 2020 explaining a rise of 1.39 percent over April, 2021 and of 77.88 percent over May 2020. In terms of US dollars the imports in May, 2021 were registered to $ 5,308 million (provisional) as compared to $ 5,242 million (provisional) in April, 2021 explaining a rise of 1.26 percent and by 85.79 percent as against to $ 2,857 million in May 2020. Imports during July-May 2020-21 totaled Rs. 7,992,202 million (provisional) as compare to Rs. 6,418,372 million during the same period of last year showing a rise of 24.52 percent. In terms of US dollars the imports during July-May 2020-21 totaled $ 50,039 million (provisional) as compare to $ 40,849 million during the same period of last year showing an increase of 22.50 percent. Furthermore, PBS also record that main commodities of imports during May, 2021 were registered petroleum products (Rs. 86,724 million), petroleum crude (Rs.48,626 million), natural gas, liquefied (Rs. 42,396 million), palm oil (Rs. 39,108 million), plastic materials (Rs. 33,563 million), iron & steel (Rs. 33,219 million), electrical machinery & apparatus (Rs.29,707 million), mobile phones (Rs.26,903 million), medicinal products (Rs.23,834 million) and power generating machinery (Rs.22,845 million).
In last I would like to mention here, the better performance of external sector in FY2021 is projected to continue in coming years on account of domestic economic rebound as well as worldwide economic recovery particularly in Pakistan’s trading partners. Further Government of Pakistan efforts regarding export diversification and exploration of new destinations will assist in enhancing external sector in general and trade balance in particular.