Chairman Businessmen Panel (BMP) of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Mian Anjum Nisar has welcomed the significant drop of trade deficit by $4.8 billion to $9.7 billion in first five months of this fiscal year against $14.5 billion deficit of the previous year’s July-Nov period.
However, he pointed out that this 33 percent decline in trade deficit is contributed by more than 90 percent from import side not from exports side, as growth in exports remained tepid.
The Chairman BMP of FPCCI said that trade statistics for July-Nov indicate that annual trade deficit may decrease by $12 billion to $19 billion (from $31 billion) in the current fiscal year. This coupled with workers’ remittances will positively address out current account deficit woes, he said. He said that for the first time in last 15 years, imports are decreasing but low exports volumes are still the issue for the country’s economic growth.
Quoting the figures of Pakistan Bureau of Statistics, he said that exports have fallen in November over the preceding month while average rise in exports in first five months is less than 5 percent, indicating that the export target will again be missed this year too.
He said the currency devaluation, aimed at increasing exports, stoked inflation and increased the cost of doing business. Lack of diversification of export destinations and products and high cost of doing business are among the key factors behind low exports.
Mian Anjum Nisar pointed out monthly exports stood at $1.9 billion on average from July to November, which do not correspond with the hype created by the government about improvement in exports.
He expressed his fear that the government is likely to miss the annual export target until monthly shipments are increased to at least $2.5 billion in the remaining period of the current fiscal year.
The Chairman BMP said that July-Nov exports were equal to just 30 percent of the annual target of $26.8 billion, as they have shown growth of only 4.8% compared to 20 percent decline in imports.
According to the figures, imports during the period under review dropped 18.4% to $19.2 billion. In absolute terms, imports contracted $4.3 billion, which provided some relief to the country.
Mian Anjum Nisar said that overall, the strict import policy has been affecting the Federal Board of Revenue’s collection, which has resulted in a shortfall of Rs211 billion in tax revenues despite taking huge advances and blocking taxpayers’ refunds.