Islamabad Chamber of Small Traders on Sunday said the country will need almost $9.25 billion in debt repayments during the current fiscal which would be a challenge.
The amount needed to pay foreign debts and interest is almost equal to the forex reserves held by the central banks warranting foreign loan to keep the country afloat, it said.
Serious efforts are needed to control imports otherwise the deficit can jump to 25 billion dollars making it very difficult for the government to manage, said Patron Islamabad Chamber of Small Traders Shahid Rasheed Butt.
Increasing interest rates will be a hard decision as it will start contraction in the economy at this critical juncture, he added.
Shahid Rasheed Butt said that the tested recipe for controlling deficit has remained a cut in the developmental spending. However, the government can explore the option of jacking up the slab of 20 percent to 30 percent on imports.
This revision will not only discourage imports but save foreign exchange and add around Rs 250 billion in the revenue thereby reducing the deficit.
He said that the proposal for an increase in income tax should not be accepted as it will trigger evasion and corruption as the former government had already added over one trillion rupees to the burden on taxpayers.