KARACHI: The Federation of Pakistan Chamber of Commerce and Industry (FPCCI) President Irfan Iqbal Sheikh has said that the economy cannot sustain the current level of trade deficit standing at $39.3 billion for 10 months of fiscal year 2022, a statement said.
He added that it translates into approximately $4 billion per month on an average and will be close to $50 billion when the year ends, which is unprecedented in the country’s history.
Sheikh emphasised that the government should tangibly incentivise and subsidise industrialisation, import substitution, exploration of new import markets for competitive imports, IT exports and facilitate Small & Medium Enterprises (SMEs) in the export-oriented industries for the near-term gains.
He said that the access to finance should be made affordable to create an enabling environment for the businesses to remain competitive in the regional and international markets.
The FPCCI president noted that the growth rate in imports is double than in exports, nullifying the hard work of the exporters to earn foreign exchange for the country.
The time has come to take tough decisions to support exporters as the State Bank of Pakistan’s (SBP) foreign exchange reserves of $10.5 billion are not even sufficient to cover two months of imports.
Imports for the period of July 2021–April 2022 stand at $65.5 billion which shows an enormous and unsustainable increase of $20.8 billion in absolute terms.
It is pertinent to note that the government had estimated that the total imports in the fiscal year 2022 would be $55.2 billion, while in contrast, the country’s imports clocked-in at $65.5 billion in just 10 months, he said.
This phenomenon needs to be thoroughly assessed and analysed in the broader national interest and strategic measures should be put in place to ensure the economic security of the country, he added.
Sheikh maintained that the exporters have performed well during the current fiscal year as they have exported roughly 25 per cent more on a year-on-year basis and can continue to do so in the next year as well; provided the government creates an enabling environment through curtailing cost of doing business and improving the ease of doing business environment.
The exports can be boosted by ensuring reliable and affordable electricity and gas supplies to the industry; stabilising exchange rate and presenting a business-friendly budget in consultation with the stakeholders.
The FPCCI president said that the economy can be stabilised only by enhancing exports and bridging the trade gap, putting a halt to rupee depreciation, creating jobs and generating taxes.
