EUR 4.42 For Business Accounts Only

Pakistan Textiles: Exports yet to post meaningful growth

• Pakistan’s textile exports painted an unexciting picture in 11MFY17 amounting to US$11.26bn, down 2%YoY. The sustenance in value added exports provided a cushion to the 8%YoY decline posted by the non-value added sector.
• Strong PKR in 11MFY17 relative to regional currencies, coupled with subdued global demand and delay in the materialization of the exports package were key reasons for the dismal performance of textile exports, in our view.
• In the backdrop of muted global demand, INR and CNY depreciated 4.8% and 2.5% CYTD respectively against US$, in contrast to a stable PkR. Worsening current account deficit and FX reserves depletion may result in currency weakness, but the government may be able to avert the risk near term with increased borrowing