Mr. Irfan Iqbal Sheikh, President FPCCI, has stated that the economy cannot sustain the current level of trade deficit; which stands at $39.3 billion for merely 10 months of the current fiscal year, i.e. July 2021 – April 2022. He added that it translates into approximately $4 billion per month on an average and will be close to $50 billion when the year ends; which is unprecedented in our history.
Mr. Irfan Iqbal Sheikh emphasized that the government should tangibly incentivize & subsidize industrialization, import substitution, exploration of new import markets for competitive imports, IT exports and facilitate Small & Medium Enterprises (SMEs) in the export-oriented industries for the near-term gains. He also made it clear that the access to finance should be made affordable to create an enabling environment for the businesses to remain competitive in the regional and international markets.
FPCCI Chief noted that the growth rate in imports is double than that of growth in exports; and, therefore, it has nullified the diligent hard work of the exporters in the current fiscal year to earn the precious foreign exchange for the country. He further said that the time has come to take tough decisions swiftly to support exporters as SBP’s foreign exchange reserves (FER) of $10.5 billion are not even sufficient to cover two months of imports. Imports for the period of July 2021 – April 2022 stand at $65.5 billion; which shows an enormous and unsustainable increase of $20.8 billion in absolute terms.
Keeping politics aside, Mr. Irfan Iqbal Sheikh said that it is pertinent to note that the Government of Pakistan had estimated that the total imports in the Fiscal Year 2021 – 22 would be $55.2 billion; and contrarily, we have done $65.5 billion worth of imports in just 10 months. This phenomenon needs to be thoroughly assessed and analyzed in the broader national interest and strategic measures should be put in place to ensure the very economic security of the country, he added.
Mr. Irfan Iqbal Sheikh maintained that the exporters have performed exceedingly well in the current fiscal year as they have exported roughly 25 percent more on an year-on-year (YoY) basis and can continue to do so in the next year as well; provided the government creates an enabling environment through curtailing cost of doing business; improving the ease of doing business environment; ensuring reliable and affordable electricity & gas supplies to the industry; stabilizing exchange rate and presenting a business-friendly budget in consultation with the stakeholders.
FPCCI President explained that only enhancing the exports and bridging the trade gap has the potential to help stabilize the economy; put a halt to rupee depreciation; create millions of jobs and generate hundreds of billions in taxes.
