LAHORE - The business community Wednesday urged the government to prepare a new policy in consultation with all stakeholders to effectively control the fast widening trade deficit and to increase exports.

They said that it is a high time that the government should put curbs on unnecessary import of luxurious items. They said that a huge increase in the trade deficit would have dire consequences for the economy of Pakistan therefore all future trade policy initiatives should take a comprehensive view of this problem.

They 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.

They said that the economic realities show that the country cannot sustain a high and growing trade deficit therefore the trade development should be enhanced through close coordination with Chambers of Commerce and Industry.

They said that the growing trade deficit, led by 4.7 per cent decline in exports, is posing a key challenge to the macroeconomic stability of the country besides converting it into a consumer society. LCCI president Irfan Qaiser 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 increase its exports.

Moreover, the curtailment of productions due to power cuts by the local industries catering to the domestic markets also encouraged imports and contributed to the huge trade deficit therefore the measures should be taken to stem electricity shortage.