ISLAMABAD: In an alarming situation, Pakistan is heading for a gap of $ 10 billion in its inflows and outflows by December next as its liabilities are expected to reach to $ 54 billion against inflows of $ 44 billion.
Major portion of liabilities of around 26 billion plus ($ 6.5 billion at current level per month) is likely to go to imports. Pakistan is under huge pressure financially due to rising imports and it’s one of the key factors adding pressure on local currency. In open market of Pakistan one dollar stands at Rs 169.
Since July last, Pakistan’s imports bill per month has surged to $ 6.5 billion against almost half of its exports earning. At current level, Pakistan’s imports in next four months (September to December) can go up to $ 26 billion. By adding due payments to the international financial institutions, Pakistan’s total liabilities stand at $ 54 billion against total inflows (Exports, remittances and financial assistance from various donors) would be $ 44 billion.
By the end of last fiscal year, Pakistan was striking a balance in inflows and outflows and its current account was in surplus, but then it relaxed restrictions like one imports of cars and luxury items that pushed Pakistan’s economy into grey area again.
Pakistan money changers association chairman, Bostan Khan, said big rise in trade deficit was a discouraging development and it needs to be addressed on top priority basis. He said the government has taken a very important decision of swap currency trade between Afghanistan and Pakistan and it would help reduce pressure on Pakistan’s currency and at the same time it would facilitate Afghan traders to trade from Pakistan.
He said ‘Finance minister, Shaukt Tarin, must be appreciated for taking in time decision of allowing swap currency trade between Pakistan and Afghanistan and it would unleash a new era of trade between the two neighbours. He noted that the government should restrict import of luxury items including cars to keep trade deficit within some manageable limit. Mr Khan argued restricted imports of luxurious items and cars can help save $ 1.5 billion per month.
Dr Abid Suleri, Executive Director Sustainable Development Policy Institute (SDPI), endorsed Bostan Khan’s point of view on import of luxury items and said “ Right now Pakistan is facing extremely challenging situation that requires to put in place all those steps which can help the national economy function without any burden. He said there was no need to keep importing luxurious items and cars in the current challenging situation. Dr Abid Suleri also proposed to the government to put in place a strict monitoring system in currency markets to stop illegal buying of dollar and its outflowing from Pakistan.