LAHORE: Pakistan`s exports have been in free fallfor the last two years and concerted efforts should be made to arrest the declining trend.

This was stated in the review of economy for the first quarter of 2016-17 issued by the Institute for Policy Reforms on Friday.

Exports declined by 8pc in 2014-15, a further 12.5pc in 201516, and again by 9pc in the quarter under review. During the quarter, imports grew by 10pc and the fiscal deficit expanded by 29pc.

The report fears that after years of growth, overseas remittancemay have begun to decline, though it is yet early to confirm this.

Agriculture production has improved after last year`s dismal performance. Production of cotton grew by 18pc. It had fallen by 30pc the previous year. Other major crops recovered. However, against the target growth rate of 5.9pc for 2016-17, year-on-year large scale manufacturing grew by 2.3pc for the first quarter. Production declined in a number of major industries including textiles.

During the quarter, the amount of private credit decreased compared to the previous year.

The first quarter results showed worsening of both fiscal and current account deficits. Fiscal deficit was 1.3pc of the gross domesticproduct (GDP) against a target of 3.8pc for the year. Current account deficit was 1.1pc, while the year`s target is 1.5pc of the GDP.

The Federal Board of Revenue`s tax collection and federal government revenue grew by 4pc and 3pc, respectively.

On the other hand, expenditures have remained within proportionate budget. In fact, development spending is lower than the first quarter of the previous year.

The report states quick fixes will not help with the growing twin deficits and signs of medium term external vulnerability. They require structural reforms through major policy changes. Public debt will continue to rise as revenues stay well behind needs. Exportgrowth too will remain uncertain.

Savings and investment remained modest. The private investment fell f rom 10.2pc of GDP in 2014-15 to 9.8pc in 2015-16.

Growth of 4pc in year-on-year power supply is lower than the GDP growth rate. However, it is likely to improve soon. Import of power generation machinery increased greatly. In 2015-16, Pakistan imported such machinery worth USD 1.8 billion. The country imported an additional USD 795 million worth of machinery during the hrst quarter. Pakistan is expected to approach target of increasing power generation by about 13,000MW by 2018 to 2020, including 10,700MW under the CPEC.