Sustaining Trade and the Balance of Payments The impact on the volume of exports and imports during these two periods is given below: Annual Growth Rate in Volume(%) Parties Period PML(N) 2013-14 to 2017-18 PTI 2018-19 to 2021-22 Source: SBP, WDI Average REER 113.52 95.87 Exports 0.3 6.6 Imports 11.6 4.2 The policy of bringing down the REER was successful in raising the growth rate of the volume of exports and reducing the growth rate of the volume of imports during the tenure of the PTI government. Based on the above analysis, the policy ought to be to keep the REER close to 95. The over 9 percent appreciation of the rupee from the end of July to the 10 th of October 2022 has raised the REER to almost 100. This has increased the risk of a widening of the trade deficit in the coming months of 2022-23 and implying even more severe physical restriction on imports. 15.5 Over-Emphasis on Textile Exports Pakistan’s exports have been characterized by a high level of dependence on textile exports. the share of textile exports in total exports stands currently at 56.6 percent. It has declined only marginally from 61.8 percent in 2005-06. The other two product groups are agricultural commodities and other manufactures with shares of 16.6 percent and 26.8 percent respectively in 2021-22, as shown in Table 15.10. Table 15.10: Product Diversification of Exports ($ billion) 2005-06 2010-11 Agricultural Commodities Group 2.0 (12.0)* 4.5 (18.1) Textile Group 10.2 (61.8) 13.8 (55.6) Other Manufactures Group 4.3 (26.2) 6.5 (26.3) TOTAL 16.5 24.8 Index of Export Diversification** 0.535 0.589 *Share of total exports 2015-16 4.0 (19.2) 12.4 (59.6) 4.4 (21.2) 20.8 0.563 2019-20 4.4 (20.6) 12.5 (58.4) 4.5 (21.0) 21.4 0.573 2021-22 5.4 (16.6) 18.4 (56.6) 8.7 (26.8) 32.5 0.581 Source: SBP 151