The current increase in trade deficit will drag our economy towards major downturn which is already in doldrums due to various core issues that need to be addressed by the Government on urgent basis.

Yassar Sakhi Butt, President, Islamabad Chamber of Commerce and industry (ICCI) has shown serious concern over the increasing trend in trade deficit. He said that the country could not afford rise in trade deficit for long term with the current level of foreign exchange reserves.

He was responding to the reports that trade deficit during July-December 2011 period swelled to $11.48 billion, up by 38.48 percent against $8.287 billion for the same period of last year. He was of the view that trade deficit was increasing due to higher import bill as import bill for oil and eatables ballooned by 31 percent in the first six months of 2011-12.

ICCI President said that our export oriented industries have failed to maintain export target due to severe energy shortage and our exports were on decline which would also put the country in a balance of payments crisis.

He said that the higher trade deficit leads to outflow of capital resources from the country and increases economic dependency. To control over the trade deficit, Government should improve the competitiveness of the domestic industries by ensuring uninterrupted power supply which would also improve the exports of the industrial units.

Yassar Sakhi Butt called upon the Government to take urgent measures to bring some stability in rupee value against dollar so that rapid increase in import bill could be controlled as it was the major cause of widening trade deficit. He cited the example of China, who was continuously trying to maintain its trade balance by controlling value of its currency.