During the first four months of the current fiscal year, the current account deficit is reported to have reduced to $4.81 billion. While there has been no significant drop in the import bill, the exports continue to be stagnant. This should be a cause for alarm. Cosmetic measures like the imposition of more taxes on import items have not reduced the demand for luxury and non-essential goods. The adverse trend in imports and exports indicates that the government’s economic strategy has failed to produce results. One cannot understand why the government is shying away from placing a complete ban on the import of luxury and non-essential foreign goods. This ban could have been an effective and quick tool to bring down the import bill.
Exports would grow when exportable surplus is available. For this, the production capacity needs to be raised. The new FTA with China, with whom we have a huge trade imbalance, has been deferred to be concluded by June 2019 while with other countries, negotiations have yet to take place. The government seems to be confused on the external trade front while devoid of ideas to astutely manage the foreign trade and minimise, if not overcome, the current account deficit.
Arif Majeed ( Karachi )