Luxurious lifestyle?

This refers to the news report ‘Current account turns to deficit in December’ (Jan 21). With the easing of lockdown restrictions and reopening of the economy, there has been an unexpected surge in imports, mainly of consumer goods. In December 2020, imports grew up to $5 billion, the highest level seen in any month in the last two-and-a-half years of this government, while exports growth was much smaller. Previously, the import bill was around $4 billion per month. Even though the current account deficit saw a declining trend between 2018 and 2020, it turned surplus during the first five months of the current financial year (between July and November). In December, the current account deficit reached $662 million.

There is an urgent need to curb the rising trend in the import bill as it can destabilise the country’s external account and disrupt the modest economic recovery, particularly after a steep rise in international oil prices. Imported consumer goods are filling the racks of a majority of stores in Pakistan while newly purchased luxury cars can be seen plying on roads. It is unfortunate that non-essential consumer goods are being imported out of borrowed dollars to serve a small section of the population. On the other hand, an overwhelming majority is suffering from high inflation with surging prices of food items and utilities.

Arif Majeed

Karachi