According to local media, Pakistan’s imports as a percentage of the country’s total gross domestic product or more commonly known as GDP, have soared to around 18.7%.
Previously, in 2020, according to the World Bank’s collection of development indicators, imports of goods and services as a percentage of the country’s GDP was 17.45%, marking a relative increase in the import-to-GDP ratio of the country. current year.
In contrast, other countries in the region such as India and Bangladesh recorded a total import-to-GDP ratio of 19.2% and 20%, respectively, while countries such as Turkey, the United Kingdom, the United Arab Emirates and Germany observed even more inflated figures – mainly accounting. more than 25% of the country’s GDP.
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Analysts say the large import ratio is often exaggerated, distracting attention from the real problem, which is the country’s lack of exports. Amid dwindling reserves and a moribund economy, Pakistan faces the challenge of a growing trade deficit. Currently, the country’s trade deficit has topped the $39 billion figure to mark the highest deficit in 10 months.
It is pertinent to mention that Pakistan’s exports as a percentage of GDP was recorded at 10.03%, which is significantly lower than the ratio of imports to GDP. In contrast, India recorded exports as a percentage of GDP at 18.07, which almost matches the percentage of exports. Israel, South Korea, Germany and the United Arab Emirates also have very high export-to-GDP ratios, at 28, 36.4, 43.4 and 96.8 (latest report of 2019), respectively.
To reduce the growing trade deficit, the government of Pakistan, on the recommendation of the country’s top trade body, announced an import ban on luxury items. The trade body also called for financial reforms, cutting subsidies, launching an amnesty program and called on the government to impose an economic emergency.
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However, the decision to ban the import of luxury items was seen by many as a decision purely for optics. Commenting on the recent ban, Hammad Azhar, former energy minister, said, “Saving $99 million on a $6.5 trillion monthly import bill to avoid a self-inflicted economic collapse. It is something that only this caricature government could come up with. He further added that the import of luxury items only accounts for 1.5% of the country’s total imports. He criticized the bill and argued that “such artificial measures do not support the economy”.
حکومت نے جن اشیاء کی درامد پر پاپندی لگئی وہ کُل امپورٹ کا صرف %1.5 حصۺ ۔ ایسے مصنوعی اقدامات سے معیشت نہیں سنبھلتی۔ موجودہ بحران کے وجہ منڈیوں کا اِس حکومت پر عدم اعتماد ہے۔ جلد انتخابات کا اعلان نہ ہوا تو معیشت مزید نقصان برداشت نہیں کر پا،ے گ
— Hammad Azhar (@Hammad_Azhar) May 20, 2022
Pakistan 🇵🇰: 18.7%
India 🇮🇳: 19.2%
Bangladesh 🇧🇩: 20%
Israel 🇮🇱: 28.2%
Turkey 🇹🇷: 29.3%
United Kingdom 🇫🇷: 31.9%
South Korea🇰🇷: 37.7%
We are often wrongly told that too many imports are our problem, the main problem is declining exports.
— Economy of Pakistan (@Pakistanomy) May 20, 2022