ISLAMABAD: Pakistan’s increasing trade deficit and falling exports have been posing a serious threat to the economy and to reverse the trend, government should focus on export-led growth and incentivise the sectors, especially textiles, All Pakistan Textiles Mills Association (Aptma) said on Thursday.
To this effect a delegation of Aptma is going to meet Prime Minister Shahid Khaqan Abbasi on Friday (today) to press upon the government and demand for reducing power prices, rationalisation of gas prices, release of sales tax refunds that are to the tune of Rs200 billion.
The association will also demand for early release of package and develop mechanism to control smuggling and under-invoicing.
Aptma chairman Amir Fayaz said the government needs to incentivise export sectors to increase exports and reduce trade deficit. “PM would be apprised about the high cost of doing business and would be requested for urgent measures for the revival of the industry.”
Aptma chairman said trade deficit was projected at $36 billion for the current fiscal year against last year’s $33 billion. “The whopping trade deficit is the biggest challenge to the country which is being filled through borrowings,” he added. Around 62 percent of the country exports comprise of textile related goods. Pakistan’s exports declined by 20 percent from $25 billion to $20 billion, he added.
Fayaz said around $10 billion worth of products (including $6 billion from China and $2 to $3 billion from India) were being dumped/smuggled to Pakistan annually. He further said Pakistani rupee was overvalued by 15 percent and was managed by the government, and once it started depreciating it would be unable to manage.
Although, the association appreciated the government’s decision of revising the PM’s export package that the Economic Coordination Committee (ECC) of the Cabinet has recently approved, he said the notification to this effect was yet to be issued.
Under the revised package, 50 percent of the incentive would be offered to eligible textile and non-textile exporters on the same terms as given for the period January to June 2017 without the condition of 10 percent increase in shipments.
The remaining 50 percent of the incentive would be provided if an exporter achieves increase of 10 percent or more in shipments compared to the corresponding period of the previous year.