Print Print 2023-05-31

Shortage of goods, plant closures: IMF identifies import curbs as the real culprits

  • Says financial framework underlying policies agreed with the authorities is included in staff report to be released upon IMF Executive Board’s approval of ninth review
Published May 31, 2023

ISLAMABAD: “Import suppression in Pakistan is inflicting shortages of goods and plant closures, undermining economic activity and revenue collection”.

This was stated by Esther Perez Ruiz, International Monetary Fund (IMF) Resident Representative in Pakistan, while responding to Business Recorder queries.

Replying to another question, the IMF official stated the financial framework underlying the policies agreed with the authorities is included in the staff report that will be released upon the IMF Executive Board’s approval of ninth review.

Pakistan imports declined by 28.44 percent during the first ten months (July-April) of the current fiscal year 2022-23 - from $ 65.519 billion last year to $ 46.887 billion during the current year. The country’s exports during July-April (2022-23) recorded at $ 23.174 billion against $ 26.247 billion in July-April of 2021-22, showing a decline of 11.71 percent.

Import curbs exacting terrible toll on businesses

The Large Scale Manufacturing Industry (LSMI) output declined by 8.11 percent during July-March 2022-23 when compared with the same period of last year.

Finance Ministry, in its monthly economic update, noted that Federal Board of Revenue (FBR) tax collection increased by 16.1 percent during July-April (2022-23), however, it remained less than the target.

The slowdown in economic activity and import compression is a major reason behind a significant lower-than-expected tax revenue during the review period. The ministry further stated that collection from customs duty declined by five percent primarily due to a decline in imports due to the import compression policy.

Copyright Business Recorder, 2023


Comments are closed.

TimeToMovveOn May 31, 2023 04:09am
Signing off of Pakistan .....for one last time. No more tranches. Hopefully, after October, peace and economy will prevail. Inshallah. PBHU
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Tulukan Mairandi May 31, 2023 05:59am
Dar will be forced to abandon this "import curb" policy which is solely aimed at propping up the failing Rupee. Once lifted, the Rupee will steuggle to maintain even levels at 450PKR/USD.
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Tulukan Mairandi May 31, 2023 08:56am
Dumbo Dar will do anything, however destructive, to prop up the Rupee, because he was creating a huge fuss from London when the PKR was falling under Miftah
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WarrenDesiBuffet May 31, 2023 09:09am
Dar decided to make sure his reputation as success in prior tenures may be realized by all as a fluke, and to ensure he is always remembered as one of the 2 arrogant old men who bankrupted Pakistan, first being Niazi of course
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Mehboob Ali Lalani May 31, 2023 09:58am
To curb import is essential to save foreign exchange. But the curb should be on luxury materials and foreign trips. It should not be on the items that are required for manufacturing purposes. We need to prioritize the thing to float economy.
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Haroon Sajid May 31, 2023 10:50am
Due to Political instability and poor governance of current incompetent government who are actually ruling to close all their corruption cases, Pakistan is in great crises. We are tax based economy and due to less business activities tax collection are also not as per targets. Strong measures are need of the hour.
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[email protected] May 31, 2023 11:21am
@Haroon Sajid , Problem is no one giving loans . As Pakistani awam love subsidies , free oil ,tax free shopping and etc . Solution is very clear oil price should be like any other oil importing natio (1.2-1.8 usd) . Subsidies for poor should be removed . It only help increase population better to invest that money in education and family planning. After 25-30 years pak population will jump from 249 million to 500 million. So what you suggest ?
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Dabeer Razvi May 31, 2023 11:35am
The above figures speak for themselves. Our exports have not dwindled that much as our imports. So the emphasis should be to allow raw materials for the industry and restrict import of non essentials, like luxury goods/cars etc. Our markets are flushed with imported stuff even garments, which we used to manufacture ourselves. Government should concentrate on import of Raw material for Export industry and Import substitution Industry. Prudent policies be adopted.
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Jani Walker May 31, 2023 01:46pm
IMF should also have highlighted that due to Dar & Co's persistent lying there is a trust deficit between the nation and the rulers aka PDM and Boots.
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MaiKolachi May 31, 2023 03:17pm
And the clueless RC generals thought the crooks and corrupt had some brains?
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MaiKolachi May 31, 2023 03:24pm
DAR to SS...a team of Paindoos...who have painooized Pakistan to the nth degree with the compliments of the compromised apoliticals!
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Mubashar Mirza May 31, 2023 08:21pm
IMF should promptly release funds to Pakistan without adding any condition. It will help to boast Pakistan's economic confidence. Regards
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Mubashar Mirza May 31, 2023 08:24pm
People of Pakistan are happy optimistic for bright future. Government will also look after layman needs in upcoming budget.
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Aamir Latif May 31, 2023 09:46pm
Instead of commenting and raising issues, simple thing, scarcity of forex, country has to tighten it's belt... Instead IMF should either say yes or no to SLA and just leave Pakistan for good... It's good to die one day and rise from ashes, and stand on its own feet.... People should also understand the consequences of forex limitations. Country should live within its means
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Syed Zain Hussain Shah Jun 01, 2023 01:27am
To all those who are stupid and don't understand what this means, let me explain it. IMF is directly saying to Pakistan that it should grow up and default immediately and have it's economy restructured and reformed by goray economists from the United States. The reason why Pakistan has not defaulted so far is due to our lock on imports. If we hadn't curbed the imports, Pakistan would have defaulted around August or September 2022 without a single default. The argument shouldn't be over imports which is a useless argument and means nothing, the argument should be whether it's good or not for Pakistan to declare default. Because this is what IMF is suggesting by telling us to remove import curbs. Why does the IMF want Pakistan to default in the first place? Pakistan has in recent years developed sophisticated long-range missile technology which has been targeted by sanctions from America in 2021 twice, 2022 thrice and 2023 twice again. This is what the US wants to get rid of thru IMF
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