Businessmen ask govt to keep trade deficit in check

KARACHI: Keeping in view the recent trend of rising imports, the Businessmen Panel (BMP) has urged the government to focus on uplifting exports to keep the widening trade deficit in check, which was up 32 percent to $2.683 billion in December 2020.

BMP, the ruling group of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), pointed out that the country’s trade deficit widened by nearly one-third in December 2020.

BMP Chairman Mian Anjum Nisar said Pakistan’s trade deficit widened despite a much-trumpeted rise in exports. However, “it was not sufficient to match the surge in imports that jumped to $5 billion,” he added.

“The pace of growth in imports is projected to increase further in the coming months following the abolishment of regulatory duty on imports of raw materials and semi-finished products,” Nisar said. The trade deficit between July-December increased to $12.42 billion, up by 6.44 percent. Earlier, the country’s trade deficit during FY20 had narrowed to $23 billion from $31.82 billion. “In absolute terms, Pakistan’s export proceeds edged up to just $2.35 billion in December 2020 from $1.98 billion last year, which should be accelerated further to bridge the widening trade deficit,” he added.

BMP chairman pointed out that to achieve consistency in the current account surplus for a long period without compromising industrial growth; the government had to focus on increasing exports and prioritising business and trade. Otherwise, he warned the economic problems and balance of payment could further get disturbed with the growing trade deficit.

There was need for long-term planning in import substitution, so Pakistan became self-reliant. He also emphasised on the need to adopt international best practices for priority sectors and consultations with international experts to achieve success.

Exportable items should be produced in accordance with the international demand to fully exploit the benefit of GSP-Plus status. He said that several industries and sectors were neglected in the past.