PEW welcomes widening trade deficit
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Deficit sign of investment in CPEC
The Pakistan Economy Watch (PEW) on Sunday welcomed widening trade deficit terming it a sign of heavy investments in the economic corridor which is a fate-changing project.
The situation will change after Pakistan start receiving return on investment in the economic corridor, it said.
Trade deficit swelled to 1.76 billion in the first four months of the current fiscal which was 1.08 billion in the corresponding period. The 63 percent jump in the deficit in due to falling exports, increased imports and outflow of money required to buy machinery for CPEC, said Dr. Murtaza Mughal, President PEW.
In a statement issued here today, he said that this is for the very first time in the history of Pakistan that trade deficit which is bound to put pressure of balance of payments situation is a welcome development.
Trade deficit jumped from 1.1 percent of the GDP to 1.7 percent but it seems like a temporary phase as it is not based on consumption but investment, he said.
Dr. Murtaza Mughal said that exports fell to 6.86 billion dollars in the first four months as compare to last year’s exports worth 7.09 billion dollar. This trend must be arrested through policy intervention, he said.
On the other hand, imports jumped from 13.28 billion dollars to 13.56 billion dollars which should be noticed.
The country is paying half of the import bill through remittances that fell by four percent to 6.26 billion dollars due to subdued oil prices, he said.
