The Businessmen Panel (BMP) of the Federation of Pakistan Chambers of Commerce and Industry Chairman Mian Anjum Nisar has welcomed the significant drop of trade deficit by US$4.8 billion to US$9.7 billion in first five months of this fiscal year against US$14.5 billion deficit of the previous year's July-November period.
He, however, pointed out that this 33 percent decline in trade deficit is contributed by more than 90 percent from import side not from exports side, as growth in exports remained tepid. The trade statistics for July-November indicate that annual trade deficit may decrease by US$12 billion to US$19 billion (from US$31 billion) in the current fiscal year. This coupled with workers' remittances will positively address out current account deficit woes, he said. For the first time in last 15 years, imports are decreasing but low exports volumes are still the issue for the country's economic growth, he added.
Quoting the figures of Pakistan Bureau of Statistics he said that exports have fallen in November over the preceding month while average rise in exports in first five months is less than 5 percent, indicating that the export target will again be missed this year too. The currency devaluation, aimed at increasing exports, stoked inflation and increased the cost of doing business, he said. Lack of diversification of export destinations and products and high cost of doing business are among the key factors behind low exports, he added.
Mian Anjum Nisar pointed out that monthly exports stood at US$1.9 billion on average from July to November, which do not correspond with the hype created by the government about improvement in exports. He expressed his fear that the government is likely to miss the annual export target until monthly shipments are increased to at least US$2.5 billion in the remaining period of the current fiscal year.
Copyright Business Recorder, 2019
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