Export growth can slash current account deficit to zero: APTMA

Says overall imports of the country may end up at $53 billion while exports would reach $24 billion

LAHORE: The All Pakistan Textile Mills Association (Aptma) has expressed optimism that the current account deficit can come down to zero in the next two years if the monetary policy remains tight and exports are encouraged through new investments.

In a statement, Aptma Patron-in-Chief Gohar Ejaz said overall imports of the country may end up at $53 billion while exports would reach $24 billion, thus, the trade deficit would fall to $29 billion at the end of current fiscal year. In the meantime, remittances worth $22 billion will restrict the current account deficit to $7 billion at the end of FY19, down from $19 billion last year.

In the first nine months of FY19, Pakistan’s exports were recorded at $17.1 billion and imports at $40.7 billion.

“The current account deficit has been a source of concern for the entire industry due to its negative impact on the growth of economy as well as industry,” Ejaz remarked.

He said the provision of incentives for restoring competitiveness through timely interventions by the government had started bearing fruit. He voiced hope that exports of the textile industry would cross $14 billion by the end of current fiscal year.

Ejaz revealed that a long-term textile policy was being finalised by leading textile exporters, representing the entire value chain, as part of a task force, headed by Dr Salman Shah. He pointed out that leading business groups were upbeat and other investors were ready to undertake new investment initiatives in the greenfield and expansion projects in the textile value chain.

“Economic managers need to encourage and facilitate investment projects in textile and clothing sectors in order to help capitalise on opportunities arising from the revised China-Pakistan free trade agreement (FTA), GSP Plus status and Imran Khan government’s efforts for perception management and greater market access,” he emphasised.



He also pointed out that the inflow of foreign direct investment (FDI) had not been taken into account, which was likely to increase once domestic investors started taking initiatives. He asked the government to make available long-term financing facility for indirect exports, ensure increase in cotton production, release all sorts of tax refunds for the industry, prepare a long-term policy for competitive and uninterrupted energy supply and ensure the availability of working capital to the entire value chain.

“Export-led growth is the only sustainable solution to the trade deficit in the shortest possible time,” he said.

Published in The Express Tribune, April 23^rd, 2019.

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