Economy moving towards inclusive, sustainable growth, says Tarin

Pakistan’s trade deficit widened by 120pc to $7.5b in first two months (July to August) of current FY after imports saw a massive increase and reduction in exports, reveals PBS

ISLAMABAD  –  Federal Minister for Finance and Revenue Shaukat Tarin on Monday said that Pakistan’s economy is growing at four percent, which resulted in massive increase in the imports.

“As economy registered a growth rate of 4 percent during FY2021, there is an increased demand for imports,” said the federal minister while chairing a meeting to review the trade balance situation. He stated that economy is in a state of growth. As long as trade deficit is within a sustainable level, it will stimulate economic recovery, he added.

Economic experts have recently expressed concerns over the massive increase in trade deficit of the country due to rising imports. Pakistan’s trade deficit widened by 120 percent to $7.5 billion in first two months (July to August) of current fiscal year after imports saw a massive increase and reduction in the exports. According to the latest data of Pakistan Bureau of Statistics, Pakistan’s trade deficit — the gap between imports and exports — increased to $7.5 billion during July-August period of fiscal year 2021-22.The deficit is $4.1 billion or 120 percent more than the same period of the previous fiscal year.

During the July-August period of this fiscal year, exports increased by 27.59 percent and stood at $4.6 billion as compared to $3.6 billion in the same period of last year. On the other hand, the country’s imports during the July-August period increased by 73 percent to $12.1 billion. In absolute terms the imports grew $5.1 billion, according to the PBS.

Secretary commerce briefed the participants about the trade balance situation over last two months. Considering the expansion in economic activity, import of one-time items like vaccine for COVID-19 as well as increased demand for raw materials have resulted in increasing imports during July and August, 2021.

The finance minister stressed upon the ministry of commerce to conduct sensitivity analysis and build scenarios for effective forecasting both in imports as well as exports for each month of the year.

In his concluding remarks, the finance minister said that the prudent policies adopted by the present government have stimulated economic recovery amid COVID-19 pandemic. Economy is heading in the right direction. The enhanced revenue collection along with improved ratings (Business Confidence Index and by international credit rating agencies) indicate that economy has gained momentum and is geared towards an inclusive and sustainable economic growth.

Federal Minister for Economic Affairs Division Omar Ayub Khan, Secretary Commerce, Secretary M/o Information Technology, Secretary Finance Division, Governor State Bank of Pakistan Dr Reza Baqir, Executive Director General BOI and other senior officers participated in the meeting. Adviser for Commerce Abdul Razak Dawood participated through a video link.

Meanwhile, the ministry of commerce on Monday announced that exports of home textiles, men’s garments, cotton fabric, rice, jerseys, fruits, vegetables and T-shirts increased during August this year compared to August 2020. On the other hand, exports of surgical instruments, fish & fish products, cement, tents & canvas and wood & articles of wood decreased during the same period. In terms of geographical spread, the exports to the US, China, the UK, The Netherlands, Germany and Spain increased while those to Afghanistan, Denmark, South Korea, Indonesia, Singapore and Czech Republic decreased during Aug 2021 as compared to August 2020. The exports of services during July 2021 increased by 6.4 percent to $483 million as compared to $454 million during July 2020. 

 

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