Pakistan Business Council (PBC) has contradicted the Ministry of Finance’s projection that the balance of trade and remittances together will stand in surplus of $3 billion in the current fiscal year 2023.
The projection is “unrealistic”, said Pakistan’s business policy advocacy platform of the largest private sector businesses, including multinationals on its official Twitter account.
“Instead, the balance of trade and remittances are estimated to be recorded in deficit at $4 billion in the year (FY23),” added the PBC.
It further underlined that the balance stood in deficit at $3.2 billion in the first half (Jul-Dec) of FY23. This needs to be turned into a surplus of $6.2 billion in the second half of the year.
The PBC also rejected the government’s assertion that the trade deficit would be recorded at $26.5 billion in FY23 and said instead that the deficit would reach $31.5 billion in the current fiscal year.
The government’s full-year projection for the inflows of workers’ remittances at $29.5 billion was also rebutted by the PBC which stated that the flows would sum up to a maximum of $27.5 billion in the year.
It also rejected the government’s projection for imports at $55.5 billion in the current fiscal year 2023 and estimated that the full-year imports would stand at $6.05 billion.
The government’s projection for imports is also “unrealistic on account of Haj (expenses) and fuel imports” said the PBC, adding that imports have already crunched to $35.1 billion in the first half of FY23.
“Crunching it (imports) by another $15 billion to $20.4 billion in the second half would see intolerable unemployment,” PBC said in the tweet.
The business advocacy platform, however, agreed with the Ministry of Finance’s projection for exports at $29 billion in FY23. The government said the country has achieved exports of $17.8 billion in the first half, while the earnings will fall to $11.2 billion in the second half of the fiscal year.
Meanwhile, the Pakistani currency partially recovered 0.46% (or Rs1.28) to Rs275.30 against the US dollar in the interbank market on Monday.
The recovery suggests the currency is now looking to consolidate around the current levels.
Earlier, the rupee had slumped by a net 16.5% (or Rs45.69) in the previous seven working days to an all-time low at Rs276.58 on Friday.
Market talk suggests that the rupee recovered slightly after US dollar supplies increased in the market.
Exporters have started receiving payments against their orders placed to overseas buyers. They are selling the dollars in the market, as they see the rupee consolidating at the current levels.
Published in The Express Tribune, February 7th, 2023.
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