President Pakistan Businessmen and Intellectuals Forum (PBIF), Mian Zahid Hussain has said that the imbalance between current account and trade deficit leads to acquire more loans, which should be countered by increased tax net rather than tax on the existing tax payers, increased exports and reducing imports.
He said that due to payment of foreign debt's installments constant reduction in foreign reserves is alarming. To counter the situation, lending more loans from China, Emirates and other friend countries became unavoidable. To counter the situation, Pakistan should go for improving bonds market; in addition tax net should be developed instead of acquiring more foreign loans and focus increased exports through export supporting policies. He said that foreign debts reaching to the $ 94bn volume is not at all a good sign, Government must concentrate on controlling loans.
Mian Zahid Hussain said that reducing accumulated foreign reserves to $ 16.65Bn is alarming. Government should introduce economic reforms to resolve all monetary related problems of the Country. Solid, concrete and factual policies, based on realities can help Country in this situation, on which the Policy makers must focus; otherwise the Country will be lead to worst condition, he added.
Export after experiencing constant decreased have been inclined towards growth in the first quarter of this year, however due to increase in the petroleum products and its constant and adverse impact on the balance of payment, the dollar reserves in the Country are at the lowest level. According to the international monetary fund the dollar reserves has decreased to the lowest level of $13.5bn and is further expected to lower to the $2.2bn till June of this year.
The insight securities reported that dollar reserves of Pakistan may reach below the level of Cambodia the economic volume of which is 10 times lower than Pakistan. Even the Rupee has been devalued twice this year in order to resolve the issues pertaining to balance of payment, but the matter will get sustainable solution only when exports are increasingly maintained and imports are controlled in comparison to exports.
Current credit rating of the Country by Moody's is B-3 however keeping the economic condition of the Country the Policy makers specifically the finance authorities should take some instant relief measures for the stability of Country's economy.
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