$39.3bn trade deficit in 10 months is not sustainable: FPCCI

LAHORE: Muhammad Nadeem Qureshi, Regional Chairman FPCCI, has stated that the economy cannot sustain the current level of the trade deficit, which stands at $ 39.3 billion for merely ten months of the current fiscal year, i.e. July 2021 to April 2022.

He added that it translates into approximately $ 4 billion per month on an average and will be close to $ 50 billion when the year ends, unprecedented in our history.

Nadeem Qureshi emphasized that the government should tangibly incentivise and subsidise industrialisation, import-substitution, exploration of new import markets for competitive imports, IT exports, and facilitate Small & Medium Enterprises (SMEs) in the export-oriented industries for the near-term gains.

He also made it clear that access to finance should be affordable to create an enabling environment for businesses to remain competitive in the regional and international markets.

FPCCI regional chairman noted that the growth rate in imports is double that of growth in exports; therefore, it has nullified the diligent hard work of the exporters in the current fiscal year to earn the precious foreign exchange for the country.

He further said that the time has come to swiftly take tough decisions to support exporters as SBP’s foreign exchange reserves of $ 10.5 billion are not sufficient to cover two months of imports. Imports for July 2021 to April 2022 stand at $ 65.5 billion, which shows an enormous and unsustainable increase of $ 20.8 billion in absolute terms.

Keeping politics aside, Qureshi said that it is pertinent to note that the Government of Pakistan had estimated that the total imports in the Fiscal Year 2021-22 would be $ 55.2 billion. Contrarily, we have done $ 65.5 billion worth of imports in just ten months. This phenomenon needs to be thoroughly assessed and analyzed in the broader national interest and strategic measures should be put in place to ensure the very economic security of the country, he added.

Qureshi further said that agriculture has not been among the top priority of any government. Pakistan reached 13.9 million bales (170kg) in cotton production in 2013-14. In 2020-21 barely got 7.6 million bales (150kg).

He further said that we should improve the production per acre of all our crops. In view of the variety of seed certifications, international standards should be considered. There will be self-sufficiency and save US three to four billion dollars in importing the commodity.

Copyright Business Recorder, 2022