‘Escalating import bill to exert pressure on forex reserves’

KARACHI: Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has warned that without immediate structural interventions, the continuous pivot to expensive imports to meet domestic demand will further exhaust the national exchequer and trigger a severe balance of payments crisis.

Voicing profound alarm over the unchecked expansion of Pakistan’s trade deficit during the first quarter of the fiscal year 2026-27 (Q1 FY27), he responding to the latest official figures released by the Pakistan Bureau of Statistics (PBS), he cautioned that the escalating import bill threatens the country’s macroeconomic stability and will exert severe pressure on national foreign exchange reserves.

He highlighted that the PBS data revealed that the trade deficit widened by 15.13 percent to reach USD 10.792 billion during the July-September 2026 period, up from USD 9.374 billion in the corresponding period of the previous fiscal year.

The FPCCI chief noted that this unsustainable trend persisted through the end of the quarter. In September 2026 alone, the trade deficit rose to USD 3.55 billion, marking a 6.15 percent year-on-year increase from the USD 3.35 billion recorded in September 2025.

Atif Ikram Sheikh stressed that the widening trade gap is a direct consequence of the exceptionally high cost of doing business in Pakistan, which severely hampers the competitiveness of local manufacturers against regional peers.

He highlighted that prohibitive interest rates, massive capacity charges on electricity, and elevated petroleum levies act as immense barriers to industrial productivity and value addition.

The FPCCI president maintained that, to rescue the FY27 export targets and prevent widespread industrial stagnation, the FPCCI leadership urged the Ministry of Finance and the State Bank of Pakistan to aggressively reduce the policy rate to single digits in order to provide affordable working capital to manufacturers. Furthermore, Atif Ikram Sheikh called for the immediate rationalisation of electricity and gas tariffs to align them with regional competitors, alongside targeted relief on inland logistics to bring down domestic supply chain costs.

Copyright Business Recorder, 2026