Government should check the widening trade deficit by discouraging the flow of unnecessary imports that are burdening the national kitty of Pakistan, said South Asian Association for Regional Cooperation (SAARC) Chamber of Commerce and Industry Iftikhar Ali Malik.
Speaking to a delegation of traders on Thursday, he said that the deficit widened by a manifold due to soaring imports, dwindling workers’ remittances and surging debt payments.
“Trade deficit rose 9% while remittances dropped 15% recently,” he said. “Volatility in oil price, on the back of Russian invasion of Ukraine, continues to pose major threat to Pakistan’s fragile capacity to pay its bills and debts,” he said. “On the other hand, foreign inflows have been drying up fast which needs immediate focus of the government.”
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He said that the trade deficit increased to $27.35 billion during first seven months of the current fiscal against $14.81 billion in the corresponding period of previous year.
He said that in order to avert a disastrous situation, the government should introduce emergency measures such as restrictions on imports.
Malik admitted that a set of such measures might have a temporary impact but it was not a durable solution to the problem.
He was of opinion that unless structural reforms were implemented in Pakistan in letter and spirit to boost exports and woo foreign direct investment, the country’s economy would continue to face long periods of bust after every brief boom in the economy.
Speaking on the occasion, delegation member Meher Kashif Younis said that an upward trend in the trade deficit was witnessed in the first eight months of current financial year largely driven by two fold increase in imports.
He stressed upon the government to arrest the rapid growth in imports to help stabilise the national economy.
Published in The Express Tribune, March 11th, 2022.
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