Phenomenal rise in imports stresses current account: FPCCI

Ghazanfar Bilour, President Federation of Pakistan Chambers of Commerce and Industry showed his serious concern over the continuous and drastic increase in the trade deficit of Pakistan resulting in fiscal imbalances.  The exorbitant increase in import is exerting pressure on the balance of payments and reflecting the performance of the economy.

He further informed that latest figures indicate that imports for the fiscal year 2017-18 have reached $ 61 billion, while exports remained $ 23 billion which results in a record high trade deficit of US $ 38 billion.  Despite, the imposition of regulatory duty to contain imports, it has gone more than double of the exports. While on the other hand exports from Pakistan are continuously declining after reaching US $ 25 billion in 2013-14. The imports targets for fiscal year 2018 were set at US $ 48.82 billion. Pakistan’s imports increased by 15 percent due to increase in POL prices, machinery for CPEC and devaluation of Pakistani rupee.   

President FPCCI also apprehended that if current trend in exports and imports will continue, the trade deficit will get further widen and ultimately, it may hurt economic growth, outflow of capital, transfer of resources and it will increase economic dependency. Adverse balance of payment also erodes the foreign exchange reserves that are also narrowing down.

Ghazanfar Bilour also said that many countries have trade deficit which is not unusual but deficit finance through borrowing is un-sustainable in the long term.