Govt decides to take effective policy measures to reduce unnecessary imports of luxury items

ISLAMABAD – The federal government on Thursday decided to take effective policy measures to reduce unnecessary imports of luxury items after Pakistan’s trade deficit had surged to highest ever level of $5 billion in last month (November). 

Trade deficit was recorded at highest ever level of $5.1 billion in November as against $1.9 billion in same month of previous year, showing an increase of 162.4 percent. This was the highest trade deficit recorded in a single month in terms of value. Trade imbalance is widening due to massive increase in imports that reached an all-time high of $8.01 billion from $4.12 billion over the corresponding month last year, indicating an increase of 94.41 percent. However, exports were recorded at $2.9 billion exports in previous month.

Feeling the heat of the situation, Adviser to the Finance and Revenue Shaukat Tarin has presided over a meeting to review the balance of trade at Finance Division. Federal Minister for National Food Security and Research Syed Fakhar Imam, Federal Minister for Industries and Production Makhdoom Khusro Bakhtiar, Federal Minister for Energy Hammad Azhar, Adviser to the PM on Commerce Investment Abdul Razak Dawood, federal secretaries, governor SBP, chairman FBR and other senior officers participated in the meeting. The meeting reviewed and discussed the import bill of last five months- July to Nov 2021. It was informed that the pressure on import bill was mainly due to global high commodity prices especially energy, steel, and industrial raw materials. The forum also noted that high import of vaccine contributed significantly to the rise in import bill. 

Moreover, it was informed that that there will be less import of food items, furnace oil and vaccine in the coming months that will significantly reduce the pressure on trade bill in the second half of the current fiscal year.

At the conclusion, Adviser to the PM on Finance and Revenue advised the concerned authorities to take effective policy measures to reduce unnecessary imports of luxury items.

The country’s trade deficit has increased by 117.25 percent in first five months (July to November) of the current fiscal year. The trade deficit enhanced to $20.746 billion in July-November 2021-22 from $9.549 billion over the corresponding months last year. The import bill in July-November 2021 rose by 71.59 percent to $33.11 billion against $19.296 billion over the corresponding months last year. Exports posted a year-on-year growth of 27 percent to $12.365 billion in July-November 2021 against $9.747 billion over the corresponding months last year. Muzammil Aslam, spokesperson to the Adviser to the Prime Minister on Finance on Revenue, said that imports are widening due to vaccine import and oil products. “So far $1.76b have been spent on vaccines imports in the first five months of this fiscal year; $9.5b used on energy imports which is $5b higher,” said Muzammil in tweet. “Importantly, we are sustaining all these import pressures. January-June 2022, import pressure likely to ease significantly,” he added. 

He further said that during November alone, energy imports stands at $2.4 billion (up by 166 percent), raw material $2.2 billion (up by 66 percent), capital goods machinery $1.14 billion (increased by 72 percent), food $911 million (up by 22 percent), vaccines $621 million.

Article source: https://nation.com.pk/03-Dec-2021/govt-decides-to-take-effective-policy-measures-to-reduce-unnecessary-imports-of-luxury-items