Business

Surging debt, trade imbalance eroding economic gains: LCCI

Officials say Pakistan needs to diversify its export markets

Our Correspondent November 28, 2017

The issue of huge trade imbalance can only be tackled by enhancing exports and all other ways, like imposition of regulatory duty, are a waste of time. PHOTO: FILE

LAHORE: Trade imbalance and rising foreign debt are reversing benefits of hard-earned gains and the situation will become more critical if immediate remedial measures are not taken, said officials of the Lahore Chamber of Commerce and Industry (LCCI).

In a statement issued on Monday, LCCI President Malik Tahir Javed, Senior Vice President Khawaja Khawar Rasheed and Vice President Zeshan Khalil said that the country made reasonable economic progress in the recent past, but swelling trade deficit and debt have put a reverse gear, posing serious challenges to the economy.

Tackling trade deficit by facilitating exports

They said that the trade deficit has widened in the first four months of the current fiscal year despite a 10% growth in exports. The balance of trade widened by 31.24% during Jul-Oct compared with the deficit of $9.24 billion in the corresponding period of the previous fiscal year. The LCCI office-bearers said that the issue of huge trade imbalance could only be tackled by enhancing exports and all other ways like imposition of regulatory duty are a waste of time.

Pakistan’s most favourite export markets have been Europe, North America and Gulf. The exporters need to look for new markets in Central Asia and in the south towards Africa, Indonesia and Malaysia, officials urged.

They said that Central African Republics have on the whole around $70 billion imports whereas Pakistan’s exports to them are negligible.

The officials were of the view that Pakistan should particularly sign free trade agreements with Central Asian Republics and the countries in Gulf, Indonesia and Malaysia.

Pakistani exports are also suffering due to skyrocketing input cost together with mind boggling tax regime therefore these issues should also be resolved with due consultation, the LCCI office-bearers suggested.

‘Govt has released higher refunds to exporters’

Citing figures, they said that Pakistan’s external debt has increased to $82.9 billion in the second quarter of 2017 from $75.7 billion in the same period of the previous year.

Debt servicing is eating up a major part of fiscal budget therefore, policy of acquired debt should be abandoned in the larger interest of the country, they remarked.

Published in The Express Tribune, November 28^th, 2017.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.