Imports expected to grow up to $70bn in FY21

KARACHI: In the current fiscal year, the country’s imports are expected to grow up to $70 billion as most of the raw material, agricultural produce (like wheat & sugar), petroleum products, LNG and vaccination, etc are being imported.

If the increase is in volume, it is a good sign and shows development, but if the increase is in prices it is not a good sign but a vital factor behind inflation, said Ateeq ur Rehman, economic & financial analyst.

The current trade deficit is being increased by 80% and current account is being moved from surplus to deficit. However, in the current fiscal year, exports of 'Made in Pakistan Products' either traditional and non-traditional is expected to reach $50 billion, which includes value addition products like mobile phones, and motor cycles, Pakistani furniture (modern or traditional), it is an encouraging sign, said Ateeq.

Further, he added that external debt borrowing to build up reserves is not a good step. For example if we need to refund $9 billion and have borrowed like $15 billion, the additional borrowing is on always high cost,which is not advisable.

The pressure on import bill and stress on foreign exchange will lead to a wider current account deficit. In the past, the current account was in surplus due to historic remittances by non-resident Pakistanis.

Copyright Business Recorder, 2021