Luxury items

In a bid to curb imports, increase exports and reduce trade deficit and resultantly current

account deficit, the finance team depreciated the rupee to around Rs134 in the first 100 days. Since this gamble did not pay off, a hefty devaluation was triggered last week when the rupee plunged by almost Rs7. This was a huge step into the unknown. It coincided with the hike in key interest rate to 10 percent notwithstanding the inflation being at a modest 6.5 percent.

Despite these incoherent measures, the import bill has declined marginally, exports are up by mere 3.5 percent, trade and current account deficits have shrunk slightly. Independent economists have been advising the government for a complete ban on the import of luxury and unnecessary goods to convincingly bring down the import bill in the shortest possible time as well as promote local manufactures. Pakistan’s economy is now in uncharted waters with a lot of uncertainty and panic gripping the market. It appears that the government is not ready to take radical and bold measures to rescue the economy and is merely depending on bailouts.

Arif Majeed

Karachi