Pakistan’s economy is struggling with an ever-widening trade deficit while some of its export markets are displaying exceptional growth. Italy is among the countries where Pakistan’s exports have been rising phenomenally despite the tough market conditions caused by the pandemic, as per a statement issued today by the Pakistan Embassy in Rome.
Italy has become a ‘billion dollars’ export market for Pakistan for the first time. In 11 months of this year, Pakistan’s exports to Italy increased by 46 percent, which is the highest growth rate among all of Pakistan’s export destinations in Europe. Its trade surplus with Italy increased by 84 percent during this period.
Pakistan had a trade deficit of $148 million with Italy three years ago. Despite the pandemic-driven market disruptions in the last three years, Pakistani trade with Italy recovered from the deficit and turned around to post a trade surplus of half a billion dollars. This remarkable achievement is credited to the resilience and dynamism of Pakistani entrepreneurs in the export sector that is supported by the Pakistan embassy in Italy.
Pakistan’s Ambassador to Italy, Jauhar Saleem, has been briefing the media regularly about the embassy’s initiatives for trade, investment, and remittances enhancement, including engagement with the host government, industry associations, business leaders, chambers of commerce, and small and mid-size enterprises (SME).
Pakistan’s exports to Italy have crossed $1,002 million in 11 months of this financial year, with the value-added sectors becoming the main driver of growth that has produced a trade surplus of around half a billion dollars during a crunch while the country reeling from record trade deficits. Increasingly diversified exports, including baskets, home textiles, leather, rice, plastic products, surgical instruments, general fitness equipment, and auto parts, have been the top-performing product lines.
Health consciousness during the pandemic facilitated Pakistan’s exports of articles of general fitness to increase by over 100 percent, while the export of plastic products has increased by 356 percent to make Italy Pakistan’s fourth-largest export destination for plastic products. Pakistan also improved its position as the market leader in the rice sector with a 31 percent growth in exports.
The embassy has been engaging with sourcing firms and investors, in particular, to leverage the pandemic conditions to Pakistan’s advantage in terms of the enhanced focus of Italian importers on Pakistan, which has helped to promote greater B2B interaction and exchanges of delegations.
A 10-member buying mission from the Italian leather sector recently visited Pakistan, and another delegation will visit TEXPO Pakistan in August. On the flip side, a 22-member delegation from the Pakistan Footwear Manufacturer Association (PFMA) is visiting Italy (from 11 to 15 June), and a 35-member delegation from the leather sector will visit Italy in September.
PFMA Chairman, Zahid Hussain, acknowledged the support of the Pakistani Embassy in Rome for footwear exporters in recovering from the challenging conditions and returning to a growth trajectory in the Italian market. He commended its role in establishing the Pak-Italy Footwear Technology Institute in Lahore, which is playing a vital role in furthering competitiveness and the modernization of Pakistan’s footwear sector.
There has also been an unprecedented inflow of workers’ remittances from Italy to Pakistan in the last couple of years. The overall growth in worker’s remittances from Italy has been almost 50 percent in the first 10 months of this year, making Italy Pakistan’s biggest source of remittances in the European Union (EU) and the seventh-largest in the world. The remittances are expected to cross $850 million by the end of the current financial year.
Both countries are also working on a Labor Agreement that will open new opportunities for skilled and semi-skilled Pakistani workers in the Italian market.
The Foreign Direct Investment (FDI) from Italy has also witnessed promising growth during the current year.
Corporate traveling from Italian businesses to Pakistan is picking up fast as COVID-19-related health concerns and travel restrictions abate.
Many Italian investors are currently negotiating and completing investment deals, especially in the areas of food processing, construction, chemicals, energy, textile, leather, and IT. Italy’s largest player in the energy sector, ENEL, is also exploring the Pakistani market for investment.
The Pakistani embassy is providing all the required support to facilitate the growing investments, particularly in a Joint Venture (JV) mode to promote the flow of technology and related knowledge.
The overall Pakistan-Italy commercial cooperation in the three main sectors of economic engagement is now worth $2.5 billion, which is the second-highest in the EU after Germany.
