Business community shows concern over widening current account deficit as it will further dampen the

  • February 23, 2009
Trade and industry is in deep trouble due to slowing down of economic activities caused by many external and internal factors and in these gloomy economic scenario, business community is looking for some bail out measures by the government to steer the country out of these challenges, however, the rising current account deficit, which has widened by 44 percent to $ 6.8 billion during first five months of current fiscal year will put more dampening effect on the already slump economic activities in the country, creating more difficulties for business community. Therefore, government should take urgent remedial measures to narrow down this worrying trend of rising current account deficit and take steps to create better conditions for promotion of business activities so that our economy could be able to come out of present crisis situation. These views were expressed by Mian Shaukat Masud, President, Islamabad Chamber of Commerce and Industry in a meeting at ICCI.

ICCI President said high cost of doing business, power outages, high interest rates, unsatisfactory law and order situation etc. have created unfavorable circumstances for growth of business activities due to which the country is witnessing huge outflow of capital and slow inflows. He said Pakistan is facing current account payment difficulties since January 2008 which compelled the government to utilize foreign exchange reserves for current account payments and added that if this dangerous trend could not be arrested by controlling imports, our foreign exchanges reserves will be further depleted. He said the continuing downward trend in the foreign exchange reserves also forced the government to approach the international financial institutions for bail out packages to build up its reserves and avoid default and stressed upon the government to take steps to bring diversification in our exports and promote imports substitutions to effectively deal with this problem.

Mian Shaukat Masud said that if this phenomenon could not be discouraged and current account deficit continued its upward trend, then the government would have to get new foreign loans to meet the requirement of the increasing foreign payments which will further increase our foreign debt service liabilities. Elaborating upon way forward, he said by creating enabling environment for trade and industry, curbing imports and enhancing our exports, the country could get rid of this problem, therefore, he called upon the government to involve business community in consultations and come up with a comprehensive strategy for revival of economic activities in the country so that we could minimize our dependence on imports, stimulate commercial activities, diversify our export portfolio to increase our exports which will ultimately lead to stabilization of our economy.