LCCI for well-consulted strategy to control trade deficit

RECORDER REPORT

LAHORE: While accounting under-invoicing for huge trade deficit, the Lahore Chamber of Commerce and Industry calls for preparation and implementation of a well-consulted strategy to effectively control the fast widening trade deficit to strengthen country's macro-economic position. The LCCI President Irfan Qaiser Sheikh in a statement on Wednesday said that 36.3 percent increase in the trade deficit would have dire consequences on the economy of Pakistan; therefore, all future trade policy initiatives should take a comprehensive view of this problem.

He said that it is high time that the government should put curbs on unnecessary import of luxurious items and check massive under-invoicing that is eroding the competitiveness of local economy and promoting imports. He said that at the same time, the government should also facilitate the exporters and implement all trade facilitations in letter and spirit enshrined in trade and textile policies.

The LCCI President said that the economic realities show that the country cannot sustain a high and growing trade deficit; therefore, the trade should be enhanced through close coordination with Chambers of Commerce and Industry. The growing trade deficit, led by 4.7 percent decline in exports, is posing a key challenge to the macro-economic stability of the country besides converting it into a consumer society, he added.

He also said that galloping trade deficit and resultant inflation might dent country's debt payment capacity that ultimately would not be a happy sign for the overall economy. He feared that the growing trade deficit could increase inflationary pressure, as Pakistan has reportedly been importing a number of food items including pulses, wheat, medicines and milk apart from machinery and other items. He said that apart from cutting the cost of doing business in Pakistan, the government would have to evolve a long-term strategy to make its products attractive in the global market to enhance its exports. Moreover, the local industries have curtailed their production due to massive load shedding and meeting only domestic needs. This also encouraged imports and contributed to the huge trade deficit. Therefore, the measures should be taken to stem electricity shortage, he added.