| Welcome to Global Village Space

Wednesday, July 17, 2024

Textile Exports Show Marginal Growth

Pakistan's textile exports experienced marginal year-on-year growth in March, facing challenges such as rising gas tariffs, while the country's overall trade performance showed mixed results, highlighting the need for balanced trade policies to ensure sustainable economic growth.

Pakistan’s textile sector saw a marginal growth of 3% year-on-year in March, with exports reaching $1.3 billion, according to provisional data released by the All Pakistan Textile Mills Association (APTMA). This marks the fourth consecutive month of year-on-year increases in textile exports, a positive sign for the country’s economy.

However, the overall performance of the textile sector in the first nine months of the fiscal year 2023-2024 has been less impressive, with exports down by 0.3% to $12.44 billion compared to the same period in the previous year. Additionally, on a monthly basis, exports declined by nearly 8% from February, reflecting some volatility in the sector.

Textile exports play a crucial role in Pakistan’s economy, accounting for a significant portion of its total exports. The sector is essential for generating foreign exchange, particularly at a time when the country faces challenges in maintaining adequate reserves.

Challenges Faced by the Textile Industry

Despite the recent growth in textile exports, the industry is grappling with challenges, particularly regarding energy tariffs. The All Pakistan Textile Mills Association (APTMA) has strongly opposed a 223% increase in gas tariffs over the past year, citing its detrimental impact on the export-oriented textile industry.

Read More: World Bank’s Bleak Outlook for Pakistan’s Economy

According to APTMA, the rise in energy tariffs has made it increasingly difficult for Pakistani textile products to remain competitive in the global market. With the textile industry accounting for 60% of the country’s total exports, any hindrance to its growth could have significant implications for Pakistan’s economy.

The association has urged the federal government to reconsider its decision on the steep increase in gas tariffs to alleviate the financial burden on the textile sector. Failure to address these concerns could further erode Pakistan’s competitiveness in the international market and undermine its efforts to boost exports.

Overall Trade Performance

Despite the challenges faced by the textile sector, Pakistan’s overall trade performance in March 2024 showed mixed results. While exports grew by 7.99% to $2.55 billion compared to the same period last year, imports surged by 25.86% to $4.73 billion, following the government’s relaxation of import restrictions.

However, this increase in imports led to a widening trade deficit, which expanded by 56.30% year-on-year to $2.171 billion in March 2024. Additionally, the trade deficit increased by 24.56% on a month-on-month basis from February 2024, highlighting the need for balanced trade policies to sustain economic stability.