Pakistan's ready-made garment exports hit an all-time high in January after textile makers cashed in on the benefits the government recently gave to the country's largest exporting industry, a report by Sherman Research said on Monday
KARACHI (Pakistan Point News / NNI - 18th February, 2019) Pakistan's ready-made garment exports hit an all-time high in January after textile makers cashed in on the benefits the government recently gave to the country's largest exporting industry, a report by Sherman Research said on Monday. Shares of ready-made garments in the overall textile exports is on the rise for the last couple of months, the report said, adding that the country sold $256 million worth of ready-made garments in the global market in January.
This is because Pakistan's value-added textile industry is becoming competitive in the wake of the recent incentives given to textile exporters.The Pakistan Tehreek-e-Insaf government has been giving incentives to export-oriented sectors with a particular focus on the textile sector, which makes up for more than half of the country's exports.Recently, the government has reduced the duties on the import of raw material and provided exporters with cheaper gas and electricity, bringing their input cost down.
These benefits made the sector more competitive in the international market because of a reduction in their cost, which helped them reduce prices and compete with their international rivals.The ready-made garments contribute 29% in the value-added segment and account for more than a fifth of our overall textile exports. According to the Pakistan Bureau of Statistics, our exports increased 8% this January compared to the same month of 2018.
When put in terms of the rupee, the increase was 35% because of the devaluation of the rupee against the US dollar.Growth in garment exports bodes well for local manufacturers since this segment enjoys the highest [profit] margins, the report said. In rupee terms, our garment exports grew by a stunning 38% in January over the comparable period of 2018, it said.Pakistan is facing a trade loss (deficit) because its imports are more than twice its exports, which means for every Dollar earned, we spend two.
This negative trade balance has put pressure on our currency, which depreciated 27% against the dollar last year.The incentives given to the textile sector is part of the government's policy to reduce our trade gap and increase our dollar reserves. These incentives coupled with rupee devaluation has helped reduce our balance of payment gap by 31% in January, according to Adviser to the Prime Minister on Commerce Abdul Razak Dawood.Dawood, however, said in a presser last week that our export growth is not satisfactory and remains below expectations. The impacts of Currency devaluation on our exports and imports will be more apparent in the months to come, he said. NNI
