Pakistan’s textile exports are projected to decline significantly in July, possibly to $1.5 billion, according to the All Pakistan Textile Mills Association (APTMA), the trade organization that represents the country’s largest industrial sector.
Taking to social media, the organization stated that preliminary data showed that textile exports stood at $1.16 billion for the first 25 days of July, while posting tweets from Asad Naqvi, a senior research analyst at APTMA.
“We expect full-month textile exports to be about $1.5 billion,” Naqvi said. This figure is 17% lower than the $1.8 billion in textile exports recorded in June.
Naqvi blamed the decline on the severe energy supply issues.
The development comes only weeks after APTMA requested authorities to restore gas and RLNG supply to the export-oriented industry as soon as possible, warning that a loss of over $1 billion in exports will occur, causing severe economic damage.
Pakistan’s textile sector provides for a significant portion of the country’s exports, which are critical for the country’s cash-strapped economy. According to the State Bank of Pakistan (SBP), textile group exports increased 17.2 percent month on month, reaching $1.802 billion in June 2022 from $1.537 billion in May 2022. Textile exports increased by 23.5 percent year on year, reaching $1.459 billion in June 2021.
Pakistan suffers from a lack of foreign exchange, with officials primarily concerned with ensuring dollar inflows. Many analysts have emphasised the importance of exporting in such an economy, particularly in a rupee-depreciating one.
In a statement issued on Friday, APTMA also warned that Pakistan is on the verge of economic catastrophe.
“With depleted foreign currency reserves, rising inflation, a free-falling exchange rate, and excessively high interest rates, the country is on a path similar to Sri Lanka’s economic catastrophe,” APTMA stated in a statement.
Political stability and consistent policy implementation, according to the textile organisation, are critical for economic growth and the export sector to prosper and generate dollar profits to stabilise the balance of payments for a sustainable economic future.
APTMA was likewise concerned about the exchange rate. “In Pakistan, exchange rate volatility has a considerable negative link with sectors exports such as textile.” A negative indicator suggests that a rise in relative price is to blame for the drop in export demand.
