Pakistan records trade surplus with Italy

[Judicary-Media Mafia]

ISLAMABAD:

Despite the Covid-19-fuelled lockdown and supply chain disruption, Pakistan has fared quite well by registering a visible growth in the Italian market in FY20, said Ambassador of Pakistan to Italy Jauhar Saleem.

Speaking to the Pakistani and Italian media, Saleem said Italy was the eighth largest economy of the world with gross domestic product (GDP) of $2 trillion. It is the third largest economy in the European Union (EU) after Germany and France and the ninth top export destination for Pakistan as it hosts the largest Pakistani diaspora in the EU.

Italy is facing tough times due to the widespread impact of the coronavirus pandemic on its economy and the International Monetary Fund (IMF) has projected a 9-11% contraction in the Italian economy whereas the Italian central bank is anticipating a decline of 9-13% in its GDP this year.

The ambassador pointed out that in FY19 Pakistan had a trade deficit of $164 million with Italy. However, in fiscal year 2019-20, despite the coronavirus outbreak and lockdown in the country, Pakistan managed to record a trade surplus of $210 million.

“So, the balance of trade is in Pakistan’s favour now. In FY20, Pakistan’s exports to Italy were $731 million and imports stood at $521 million.”

Pakistan mainly exported textile, leather, rice and ethanol to Italy. “Pakistan is a market leader in rice and it holds 38% share in the Italian market as the country exports rice worth $62 million,” the envoy added.

Thailand has a share of 12% with $19 million worth of export to the Italian market whereas India ranks at number three with a 10% share and $17 million worth of exports. Saleem also shared the strategy to promote Pakistani goods in the Italian market.

Talking about Italian investment in Pakistan during 2020, the ambassador said it had increased by 45% compared to the previous year. The investment jumped to $56.4 million in FY20.

Foreign direct investment from Italy was mostly concentrated in energy, pharma, chemical and IT sectors. A major investment went to the energy sector.

“Italy has planned to invest in renewable energy in Pakistan. Pakistan’s embassy in Rome is facilitating these new investment projects.”

The ambassador said Italy had become the largest contributor from the EU to home remittances to Pakistan. In FY20, the remittances grew 29%, which was far higher than the growth in overall remittances.

The envoy revealed that the embassy had undertaken a number of initiatives so that Pakistani labour force could stay in Italy even during the lockdown instead of returning back to their home country.

“This strategy has delivered and with the improving market conditions, Pakistanis are back to work and worker remittances have registered 77% growth in June 2020.”

Responding to a question, Saleem said the Italian government had decided to temporarily regularise the migrants working in the agriculture sector and as domestic helpers to fill the gap in key jobs, and allow health coverage to the workers.

Pakistan’s undocumented workers are among the main beneficiaries of this scheme.

The ambassador stressed that Pakistan was enhancing areas of cooperation with Italy. Currently, Italy is providing technical assistance in textile, leather and marble sectors. Pakistan is working to expand it to dairy and livestock, olives and olive products, plastics, processed food and construction sector.
Source

 

[Shahid Abassi]

Nothing worth anything unless you increase your export. Cutting down imports is no big deal. Everyone can do it but the people have to pay the price as Pakistanis are paying now.

 

[Ali-NZ]

Good news for all Pakistanis under the leadership of an honest PM Imran Khan

 

[miafridi]

This is good, and should be used as a model for the success story in other countries. If you appoint good people in all countries who reduces the trade deficit in their respective country then of course you can get into surplus trade with all the countries meaning an overall trade surplus.

 

[Judicary-Media Mafia]

Nothing worth anything unless you increase your export. Cutting down imports is no big deal. Everyone can do it but the people have to pay the price as Pakistanis are paying now.

I knew it when I seen your name Shahid Abbassi he was big CNG thief and air blue smuggler and money launder. If import was easy why your masters couldn’t do it?

 

[Sonya Khan]

Nothing worth anything unless you increase your export. Cutting down imports is no big deal. Everyone can do it but the people have to pay the price as Pakistanis are paying now.

So what use were those imports put to ? ....
Did they increase our exports ???..... No
Did they reduce our foreign debt ??....No
So what good are imported mushrooms and Nutella for ???? .....

 

[Shahid Abassi]

I knew it when I seen your name Shahid Abbassi he was big CNG thief and air blue smuggler and money launder. If import was easy why your masters couldn’t do it?

haha. They did not do it because they thought of votes and not Pakistan. When they came in power, the current account was in deficit by 2.5 bn USD and it is they who took it to 20 bn. So what to expect of someone who believes in expanding import to attain growth.

 

[Shahid Abassi]

So what use were those imports put to ? ....
Did they increase our exports ???..... No
Did they reduce our foreign debt ??....No
So what good are imported mushrooms and Nutella for ???? .....

Did I say it was good to have big import bills? Sure, expanding imports give the economy a boost, growth, and jobs but it is always short-lived if not matched by more exports.
What I said was, it is not a difficult job to put brakes on imports if you are ready to face the anger of your people. The hardest job is to make policies that can help increase exports.

 

[Sonya Khan]

Did I say it was good to have big import bills? Sure, expanding imports give the economy a boost, growth, and jobs but it is always short-lived if not matched by more exports.
What I said was, it is not a difficult job to put brakes on imports if you are ready to face the anger of your people. The hardest job is to make policies that can help increase exports.

It’s trade surplus ..... plus the current account deficit has been managed ..... Isn’t it a policy reflection???.....

 

[chandaa]

Govt policies prevented destruction of economy during lockdown and this is why gutter opposition and media are sad!

 

[Shahid Abassi]

It’s trade surplus ..... plus the current account deficit has been managed ..... Isn’t it a policy reflection???.....

(1) It's not a trade surplus for sure. Trade is still 24 bn USD in the red as we sell a lot less than we buy. The current account takes remittances into the equation and the loss on the trade is thus balanced by the remittances. Our current account deficit is now fallen from -20 bn USD to 3 bn USD.
The current account contains all ins and outs of foreign currency, be it trade in goods, trade in services, remittances, earned incomes abroad through investments, and in contrast, the paid out incomes to foreign investments in Pakistan.
(2) Sure what our government did is a policy reflection. It was like an imposed policy by the situation created by the Sharif government.
(3) The problem with letting the imports be increased is something you can please the voters with, create a false bubble of growth, and ride a happy small journey of winning hearts. But the problems when dragging it back are intense and severe in ten folds. Cutting imports hurt very severely. Jobs are lost, prices go double, economic growth is hammered down and interest rates rise and with that hundreds of bankruptcies are faced.

Now back to my comment. I acknowledge that the government has taken very difficult decisions in cutting the imports and facing the music of people's anger. Or maybe there was no other choice left as no one would have borrowed us 158 billion USD in the coming five years to finance the gap. But on the other hand, I would like the government to do their utmost to increase our exports too so that the people don't have to suffer so badly. An increase in export would still allow you to import more and even then stay in the balance.

 

[Sonya Khan]

(1) It's not a trade surplus for sure. Trade is still 24 bn USD in the red as we sell a lot less than we buy. The current account takes remittances into the equation and the loss on the trade is thus balanced by the remittances. Our current account deficit is now fallen from -20 bn USD to 3 bn USD.
The current account contains all ins and outs of foreign currency, be it trade in goods, trade in services, remittances, earned incomes abroad through investments, and in contrast, the paid out incomes to foreign investments in Pakistan.
(2) Sure what our government did is a policy reflection. It was like an imposed policy by the situation created by the Sharif government.
(3) The problem with letting the imports be increased is something you can please the voters with, create a false bubble of growth, and ride a happy small journey of winning hearts. But the problems when dragging it back are intense and severe in ten folds. Cutting imports hurt very severely. Jobs are lost, prices go double, economic growth is hammered down and interest rates rise and with that hundreds of bankruptcies are faced.

Now back to my comment. I acknowledge that the government has taken very difficult decisions in cutting the imports and facing the music of people's anger. Or maybe there was no other choice left as no one would have borrowed us 158 billion USD in the coming five years to finance the gap. But on the other hand, I would like the government to do their utmost to increase our exports too so that the people don't have to suffer so badly. An increase in export would still allow you to import more and even then stay in the balance.

And why in your opinion Nawaz Sharif govt failed to increase exports while increasing imports ??....... Why did our exports actually go down in his tenure when he was piling up mountain of debt on Pakistan ??.......

 

[Shahid Abassi]

And why in your opinion Nawaz Sharif govt failed to increase exports while increasing imports ??....... Why did our exports actually go down in his tenure when he was piling up a mountain of debt on Pakistan ??.......

We have had no real increase in exports for the last 10 years and it is still the same story.
There is no innovative thinking to solve the problem. Every government here tries to give exporters some financial incentives through subsidies in electricity, gas, and taxation, and then they expect them to sell more. But this would never make it big. They need to support new industries, new sectors, new exporters with new products. They need to help them establish new marketing channels. It was expected that by lowering the value of rupee, our export goods will get cheaper which in return will take our exports to 30 bn USD in two years but nothing moved.
Sharif's last two years gave a 13% p.a. increase in exports and a similar increase may come our way in 2020-21 but I don't think it is enough to support any growth.

Had I been doing it, I would support furniture, meat, shoes, and other industries by giving them interest-free loans and 5 year tax holiday. I would have hired designers and technicians from Italy, Sweden, and other European countries with tax payer's money to support it all.
.
Lastly, talking about the increase in debt, it is the same or possibly the worst situation in debt-increase even now. Our debt was 24000 bn in 2018 and is 35000 bn now after two years.