ISLAMABAD: Pakistan’s trade deficit raised to $15.1 billion in the first eight months of the ongoing fiscal year, despite steep decline in global crude oil prices and duty-free status of its exports to the European markets.
The trade bulletin released by the Pakistan Bureau of Statistics on Friday showed the value of imports was more than double the value of exports for the second month in a row.
The trade deficit was $612 million higher than reported in the comparative period of the last fiscal year. It almost nullified the $728 million gains Pakistan made due to increase in workers’ remittances during July-February.
The Pakistan Textile Exporters Association (PTEA) said there has been drastic downfall of 14.4% in exports of the country since July 2016 whereas exports of the competing country Bangladesh has increased by 8% in the same period.
“It is worrisome that balance of payments position worsened despite fall in crude oil prices,” said Dr Hafiz Pasha, a former finance minister.
For the record, it has happened for the first time in the country’s history, Dr Pasha stated, that the import bill was more than a double of the export bill. Something is seriously wrong with the economy that the government has to find out, Pasha said showing his concern.
The country’s total exports declined to $ 12.087 billion in the first seven months of the current fiscal year (Jul-Jan) 2015-16 from $ 14.115 billion during the same period last year. A member of the Karachi Chamber of Commerce and Industry (KCCI) said the government without perceiving the significance of time has wasted seven months of the current fiscal year and is still yet to release the trade policy and the new auto policy.
He said the federal government or the Trade Development Authority of Pakistan (TDAP) is doing nothing for the exporters as factories in Punjab and Sindh are still waiting for supply of electricity despite the declining furnace oil prices in the international and local markets.
The PTEA while issuing a press statement said: “5% of the export revenue gets stuck up in present refund regime of which resultantly massive working capital has been stuck up which is the major cause of export decline,” PTEA said. “Refunds of goods exported 12 months earlier are still outstanding”, the statement added.
“Electricity cost for industrial production is highest in the region. The honorable Prime Minister very kindly announced a relief of Rs. 3/Unit in electricity bills for January 2016 at Rs. 11.08/Unit which is Rs. 0.84/Unit higher than December 2015,” lamented PTEA in a media statement.
All Pakistan Textile Mills Association (APTMA) demanded the government late in January to wave off customs duty on cotton imports while provision of five percent rebate on textile products export. The textile mills association Chairman Tariq Saud said that at least 110 factories are shut at the time. He said that as many as 40 mills could open on immediate basis if the government imposes ten percent duty on import of artificial yarn and clothes.
Islamabad Chamber of Commerce and Industry (ICCI) had also expressed its concerns over the falling exports of the country which have dwindled in the first half of the current financial year and called upon the government to take urgent remedial measures to arrest the hazardous trend that has now created balance of payments crisis and increased current account deficit.