FPCCI for putting industry on priority to bridge widening trade deficit gap

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has asked the government to put the industry on priority for consistency in exports and long-term economic growth, as the trade deficit has posted double-digit growth, widening by over 10% to $17.54 billion in the first eight months of 2020-21.

“The economic managers were boasting of their performance on the plea of current account balance, which remained surplus till Oct 2020 on the back of a sustained increase in remittances and a smaller trade deficit. But now the trade gap has been widening since Dec 2020, as it has swollen by almost 24% to $2.52 billion in Feb 2021 mainly due to decline in exports and soaring imports,” observed FPCCI’s ruling group BMP Chairman Mian Anjum Nisar. He was talking to a trade and industry delegation, who met him here in his office today.

This is the second consecutive month that country’s exports have been dropping from their previous levels, as the $2 billion worth of export receipts were the lowest in five months, he said and added that the exports had started picking up early this fiscal year and peaked to $2.4 billion in Dec, prompting jubilations by the government. Now, this proved to be a short-term achievement, as the exports again started sliding towards a normal range of $2 billion, he added.

Mian Anjum Nisar observed that country’s exports have long remained around $2 billion a month and the trend did not significantly change despite 30% currency depreciation by this government during the past two and a half years. The Businessmen Panel (BMP) Chairman said the low exports volume and rising trade deficit were chronicle issues that should be resolved permanently.

He said exportable items should be produced in accordance with the international demand to fully exploit the benefit of GSP-Plus status. He said that several industries and sectors were neglected in past. He said decisions should be made in the national interest, keeping aside the personal agenda.

Mian Anjum Nisar called for a holistic approach to speed up economic growth, as COVID-19 has adversely impacted the world’s economy as well as Pakistan’s trade and industrial sectors.

“With a view to achieving consistency in current account surplus for a long period without compromising industrial growth the government will have to focus on increasing the exports and put the business and trade issues on priority, otherwise, the economic problems and balance of payment could further disturb with the growing trade deficit,” said FPCCI ex-president.