August 23, 2017
President Pakistan Businessmen and Intellectuals Forum (PBIF), President AKIA, Secretary General of the Businessmen Panel of FPCCI and former Provincial Minister Mian Zahid Hussain on Wednesday said trade gap and ballooning current account deficit will result in another IMF package to forfend serious balance of payments crisis and subsequent default.
The current account deficit has surpassed the mark of two billion dollars in the month of July which is eating up foreign exchange reserves and damaging the Pakistan Stock Exchange, he said.
Mian Zahid Hussain said that the situation will lead to the serious balance of payments crisis as the annual current account deficit may surpass the mark of sixteen billion dollars.
The country will receive almost 12 billion dollars in the ongoing fiscal while it will need 24 billion dollars for other requirements and the gap can only be bridged through IMF loan worth eight billion dollars, he suggested.
He said that exporters and some economic experts are suggesting that rupee would be devalued soon has resulted in increased imports and stockpiling which has added to the problem.
Devaluation will help exports in the short-run but it will also make imports costly which are much more than the exports hence damaging masses, CPEC, and all developmental activities, he warned.
He said that the intentional erosion in the exchange rate will jack up the prices of machinery and imported raw material increases the cost of doing business while making debt servicing difficult. Due to prevailing situation, Mian Zahid Hussain has demanded the Govt. to resolve this problem on top priority basis.