The business community is concerned over Pakistan’s rising trade deficit which has swelled to $8.736 billion in the first five months (July to November, 2008) of current fiscal year as compared to $7.264 billion of the same period of last year, showing an increase of 20.27 percent and government should bring drastic reduction in the import of all luxury items as well as take steps to boost the production of agricultural and industrial sectors for enhancing exports to cope with the trend of rising trade deficit, stated Mian Shaukat Masud, President, Islamabad Chamber of Commerce and Industry while expressing his comments over rising trade deficit. He said the soaring trade deficit, with no parity in imports and exports, will create further troubles for the already gloomy economic situation and added that running a high trade deficit throughout the year with imports twice the exports remains a big challenge for the economic managers as the country faces immense pressure on foreign exchange reserves already touching alarmingly low position.

ICCI President said the best option for the government to deal with this situation is to drastically reduce or put a ban on the import of all luxury items and also bring down mark up on loans for industrial sector to give a boost to exports as high cost of doing business and frequent power disruptions are hampering the growth of exports. He said that another way out is that government should adopt a strategy to boost industrial and agriculture production and reduce non-development expenditure. He said for this purpose, government should take steps to do and encourage massive investment in agriculture and industrial sectors by involving domestic and multinational entrepreneurs to add value addition in both the sectors and to meet aggregate demand for domestic consumption of food and other products.

Mian Shaukat Masud said the government needs to initiate necessary measures to boost the production of all major and minor agricultural crops, vegetables etc. He said a significant increase in agricultural production would raise the country’s GDP growth and the revenue collection would also increase. Besides, he said, sufficient production of the major and minor agricultural crops would help in bringing down food inflation provided that the government is able to check hoarding, profiteering and smuggling of edible items. He said self-sufficiency in agricultural production would help in reducing the imports and raising the exports of agricultural products. He said that agricultural products such as cotton and sugarcane are used by our industrial sector and thus good performance of the agriculture sector should lead to good performance of the industrial sector, as well. He said these measures will lessen our dependence on imports ultimately bringing down the rising trade deficit and will bridge import-export gap that might hover around $14 billion despite decrease in prices of oil, commodities and metal products in international market.