ISLAMABAD (Web News )
The Islamabad Chamber of Commerce & Industry (ICCI) has shown great concerns over the rising trade deficit, which has shot up by over 97 percent in March this year as compared to the corresponding month of last year and called upon the government to focus on promoting exports competitiveness of the country to enhance exports and reduce trade deficit on permanent basis.
Sardar Yasir Ilyas Khan, President, Islamabad Chamber of Commerce & Industry said that the trade deficit has ballooned to USD 2.968 billion in March this year from USD 1.502 billion in March 2020, while during a period of nine months, the trade deficit has jumped to USD 21.241bn from USD 17.352bn over the corresponding months of last year, showing an increase of over 22 percent, which should be a cause of serious concerns for the policymakers. He said that the rising trade deficit would create serious balance of payment problems, cause further depreciation of rupee leading to destabilization of the overall economy and emphasized that the government should take urgent remedial measures to address this issue.
Sardar Yasir Ilyas Khan said that enhancing exports competitiveness was the right solution to reduce trade deficit as Pakistan’s economic growth was dependent on promoting exports to earn foreign exchange reserves, finance imports, service debt, stabilize currency and tackle the persistent problem of the balance of payment deficit. He highlighted higher tariffs structure, lack of infrastructure & technological advancement, erratic growth trends, low penetration in global markets and inconsistency in government policies as main hurdles for exports promotion and urged that the government should take strong measures to address these issues.
ICCI President said that the government should focus on the IT sector for exports as there was a growing demand in the global market for IT and software products. He said that India’s IT sector exports were estimated at USD 147 billion in FY 20, However, exports of Pakistan’s IT and IT enabled services reached just USD 1.298 billion during July to February of FY 2020-21 while there was great potential to further enhance them. He said that the government should provide better incentives to industries for moving their production from low value to high value products that would help in improving exports.
Fatma Azim Senior Vice President and Abdul Rehman Khan Vice President ICCI said that the SMEs were playing important role in the economy as they were making around 25 percent share to exports and urged that the government should form new policies to offer them easy access to finance at minimum interest rates so that these businesses could upgrade machinery & technology that would enable them to further improve exports. They said that the government should also simplify exports related regulations and focus on policy reforms in consultation with the private sector for exports promotion. They suggested that the government should cooperate with the private sector in diversification of products and markets that would help in improving exports and reducing the country’s trade deficit.