Pakistan’s Exports Decline for Eighth Straight Month: Bloomberg

By Khalid Qayum

July 13 (Bloomberg) -- Pakistan’s exports fell in June for the eighth straight months as the worst global recession since the Great Depression damped demand for the nation’s products.

Shipments from South Asia’s second-largest economy declined 19.4 percent from a year earlier to $1.54 billion are dropping 21.9 percent in the previous month, according to the statistics bureau. Imports tumbled 17 percent to $3.34 billion, taking the trade deficit to $1.8 billion.

Pakistan exporters are struggling to find buyers for the nation’s textiles and rice amid what the World Trade Organization says will be the worst contraction in global trade since World War II. HSBC Holdings Plc expects Pakistan’s $146 billion economy to expand as little as 0.8 percent in the year to June 2010, the weakest pace since 1952.

Overseas sales from Pakistan are being hit as “competitors elsewhere take an even greater share of a shrinking export market,” said Frederic Neumann, a senior economist at HSBC in Hong Kong.

Textile manufacturers in Pakistan compete against producers in other Asian nations including Sri Lanka, Bangladesh and Vietnam for sales in the U.S. and Europe, which are both in recession. Sri Lanka’s exports have declined for five straight months, falling 28.2 percent in April from a year earlier.

Cotton spinners in Pakistan and elsewhere still view the business outlook for the current quarter with a “great deal of caution,” according to a quarterly survey by Cotlook Ltd.

‘Optimism Faded’

“Optimism of a swift turnaround in fortunes seems to have faded in Pakistan, in the face of a slump in the pace of recent yarn orders,” Cotlook said in a statement on July 9.

Pakistan’s exports fell 6.7 percent to $17.8 billion in the full year to June 30 and imports declined 12.9 percent to $34.8 billion. The trade gap narrowed 18.5 percent to $17 billion, according to government figures.

While Pakistan’s exports receipts are eroding, the country is still accruing foreign reserves from record remittances from nationals working abroad.

Remittances from Pakistanis living overseas rose 21 percent to an unprecedented $7.8 billion in the year to June 30, the central bank said in a statement on July 10.

Workers in Saudi Arabia transferred $1.56 billion, compared with $1.25 billion a year ago. Pakistanis in the Gulf, including Bahrain, Kuwait, Qatar and Oman, sent home $1.2 billion, compared with $983 million a year earlier.

Global Rebound

Pakistan’s may also start to recover over the next year amid signs that the worst may be over for the world economy.

The International Monetary Fund last week said the global economic rebound in 2010 will be stronger than it forecast in April as the financial system stabilizes and the pace of contractions from the U.S. to Japan moderates.

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