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Pakistan’s textile exports see massive decline of 28% in Feb

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  • Textile exports plunge to $1.2 billion in February.
  • Exports in first eight months of FY 2023 decreased by 11%.
  • APTMA urges govt to seek concession from IMF for exporters.

KARACHI: Pakistan’s textile exports dropped for the fifth consecutive month in February, seeing a decline of 28% and landing at $1.2 billion as compared to the same month of the last fiscal year, The News reported Tuesday. 

All Pakistan Textile Mills Association’s (APTMA) data showed a dismal picture of the exports of textile goods — the largest contributor in the overall export sector as well as the largest employment-generating sector of the economy.

The country’s textile exports in the first eight months of the current financial year decreased by 11% to stand at $11.24 billion, declining from $12.60 billion recorded in the corresponding months of the last financial year, said the APTMA. 

The decline in textile exports comes at a time when the country is already facing depleting foreign exchange reserves, which are just $3.81 billion, hardly sufficient for less than a month of imports.

Last month, APTMA urged the federal government for a level playing field by implementing a uniform gas price of $7 per mmBtu for the export industry across the country. 

It also warned that the decision of the government to suspend the regionally competitive energy tariff (RCET) of electricity for export-oriented units (EOUs) would hurt the textile industry, particularly in Punjab.

APTMA’s Secretary General Shahid Sattar in a letter to the government said that the textile industry has been asking for an electricity tariff of 9 cents despite the fact that the electricity cost, including transmission and distribution losses, stood at 8.1 cents per unit if cross-subsidies were excluded as per Central Power Purchasing Agency (CPPA) and National Electric Power Regulatory Authority (NEPRA) calculations.

The textile body wants the government to persuade the International Monetary Fund (IMF) to continue RCET for the exporters, particularly the textile sector, which was vital to make the products competitive in the international market.

“We have invested $5 billion in the textile sector over the last three years, and the textile sector surged to $19.5 billion in the financial year 2022 from $12.5 billion in FY2020,” Sattar said. 

If the government succumbs to the IMF pressure, the robust growth of 55% in exports in FY22 and investment of $5 billion would go to waste, he pointed out.

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Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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Business

SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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