(August 23, 2019)
President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain on Friday said efforts of the government to reduce current account deficit are succeeding.
The government decisions have been pushing economy towards stability but reducing exports are not enough as increasing exports can ensure sustained stability, he said.
Mian Zahid Hussain said that current account deficit is going down after a long time which is also good for Forex reserves which have remained under pressure for a long time.
Talking to the business community, the veteran business leader said that the government is trying to contain deficit by discouraging imports and increasing discount rates which is a temporary solution.
The deficit reduced by 73 percent to $579 million in July which was $2.13 billion during the corresponding period which will improve the confidence level of the business .
The former minister noted that reduced price of oil in the international market, reduced LNG imports, compact machinery imports for CPEC and drop in edible oil as well as transport group imports have also played a role.
He said that overall contraction in the economy has also helped the government reduce the deficit while high interest rate has reduced demand.
Exchange rate erosion has not helped boost exports as the cost of doing business remain high due to stuck up refunds and high energy prices, he said, adding that remittances are also stagnant which should be noticed.
He said that the government should establish sector-specific companies to boost exports as reduced imports is not a sustainable solution to tame the deficit.