Merchandise exports in September rose by 5.99 percent y-o-y to $27.58 billion, according to latest official figures. In August, exports contraction had widened to (-) 12.66 percent at $22.70 billion, after (-) 10.12 percent in July and (-) 12.41 percent in June. So, the September exports figures seem somewhat encouraging. They signal to gradual recovery of trade activities toward normalcy globally, after a long, challenging period of contraction caused by the COVID-19 pandemic.
A deeper look into the September exports figures shows that 22 out of the 30 major product groups registered growth in the month, and more importantly, some labour-intensive sectors witnessed double-digit growth, though performance by some such sectors was not that impressive. Also, some major constituents of our export basket turned positive or have started showing signs of revival in the month. However, reduction in imports, particularly of the materials used as inputs by labour-intensive sectors of exports, is not a good sign.
While the September monthly figures inspire some optimism, exports in the first five months of the financial year - April to September - give a dull picture, however. During this period we have exported lots of raw materials ranging from rice and cereals to iron ore, while exports from our major sectors like ready-made garments, leather goods, gems and jewellery, engineering products and electronics, etc. have contracted in the range of 15 -55 percent. No doubt, this trend is a concern.