Current account deficit may shrink to $7bn in FY19: APTMA

[Shahzaz ud din]

Current account deficit may shrink to $7bn in FY19: APTMA

• 

The All Pakistan Textile Mills Association (APTMA) Patron-in-Chief Gohar Ejaz has expressed hope that the current account deficit would be down to zero within two years if the monetary policy remains tight and exports are encouraged through new investments.

He said the overall imports may end up at $53 billion while exports at $24 billion, adding that this would reduce the trade deficit to $29 billion at the end of the current fiscal year.

“Remittances worth $22 billion would further reduce the current account deficit to $7 billion by the end of the current fiscal, down from $17 billion last year,” he maintained.

He said exports were recorded at $17.1 billion while imports at $40.7 billion in March 2019.

Ejaz said the current account deficit is a source of concern for the entire industry due to its negative impact on the overall economy. He said the provision of enablers for the restoration of competitiveness through timely interventions by the government has started bearing fruits.

The APTMA chief expressed optimism that the exports of textile industry would cross the level of $14 billion by the end of the current fiscal.

He said a long-term textile policy was being finalised by the leading textile exporters, representing the entire value chain, in a task force headed by Dr Salman Shah.

Ejaz said the leading business groups are upbeat and other investors are ready to undertake new investment initiatives in the greenfield and expansion projects of the textile value chain.

“It is high time for economic managers to encourage and facilitate investment projects in the textile and clothing sectors so as to avail the opportunities arising from the revised China-Pakistan free trade agreement (FTA), GSP plus status till 2023 and Imran Khan-led federal government’s efforts for perception management and further market access,” he said.

The APTMA chief urged the government to address the textile sector’s issues including availability of long term financing facility (LTFF) to indirect exports, enhanced cotton production, release of all sorts of refunds to improve liquidity, long term policy on competitive, uninterrupted energy supply and availability of working capital under ERF to the entire value chain.

Export-Led growth is the only sustainable solution to overcome the trade deficit in the shortest possible time, he concluded.

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[ziaulislam]

Current account deficit may shrink to $7bn in FY19: APTMA

• 

The All Pakistan Textile Mills Association (APTMA) Patron-in-Chief Gohar Ejaz has expressed hope that the current account deficit would be down to zero within two years if the monetary policy remains tight and exports are encouraged through new investments.

He said the overall imports may end up at $53 billion while exports at $24 billion, adding that this would reduce the trade deficit to $29 billion at the end of the current fiscal year.

“Remittances worth $22 billion would further reduce the current account deficit to $7 billion by the end of the current fiscal, down from $17 billion last year,” he maintained.

He said exports were recorded at $17.1 billion while imports at $40.7 billion in March 2019.

Ejaz said the current account deficit is a source of concern for the entire industry due to its negative impact on the overall economy. He said the provision of enablers for the restoration of competitiveness through timely interventions by the government has started bearing fruits.

The APTMA chief expressed optimism that the exports of textile industry would cross the level of $14 billion by the end of the current fiscal.

He said a long-term textile policy was being finalised by the leading textile exporters, representing the entire value chain, in a task force headed by Dr Salman Shah.

Ejaz said the leading business groups are upbeat and other investors are ready to undertake new investment initiatives in the greenfield and expansion projects of the textile value chain.

“It is high time for economic managers to encourage and facilitate investment projects in the textile and clothing sectors so as to avail the opportunities arising from the revised China-Pakistan free trade agreement (FTA), GSP plus status till 2023 and Imran Khan-led federal government’s efforts for perception management and further market access,” he said.

The APTMA chief urged the government to address the textile sector’s issues including availability of long term financing facility (LTFF) to indirect exports, enhanced cotton production, release of all sorts of refunds to improve liquidity, long term policy on competitive, uninterrupted energy supply and availability of working capital under ERF to the entire value chain.

Export-Led growth is the only sustainable solution to overcome the trade deficit in the shortest possible time, he concluded.

source

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this simply shows how this crisis was artificially created and was corrected without any major changes

a CAD of 2-3% of GDP is normal phenomena for any developing country which mean by end of next year we would have solved the fiscal crisis, this artifically vreated crisis has hurt pakistan growth, had previous two govt refrained from doing so pakistan would have been growing by 5+ by now

 

[Taha Samad]

this simply shows how this crisis was artificially created and was corrected without any major changes

a CAD of 2-3% of GDP is normal phenomena for any developing country which mean by end of next year we would have solved the fiscal crisis, this artifically vreated crisis has hurt pakistan growth, had previous two govt refrained from doing so pakistan would have been growing by 5+ by now

And what did our "Legendary Kaptaan" do? Throw the man behind this quick improvement under the bus.

 

[AZ1]

And what did you "Legendary Kaptaan" do? Throw the man behind this quick improvement under the bus.

who brought him at first place? May be next will do more good. But yeah keep crying when good is happening and keep shouting when great is coming.

 

[Taha Samad]

who brought him at first place? May be next will do more good. But yeah keep crying when good is happening and keep shouting when great is coming.

I think you misunderstood me. I had been very vocal supporter of PTI govt till Asad Umar was sacked.

Yes may be(and I hope) Hafeez Sheikh continues or even does better than AU. But I am very apprehensive and I have good reasons to be apprehensive.

1) News coming from PTI-circles is that JKT and Abraj group CEO met IK while AU was in Washington for IMF deal and convinced IK that Asad isn't able to handle economy. He has needlessly delayed IMF and has brought economy to stand-still and there is uncertainty in business community and that he should be replaced with an economist. Humayun Akhtar PTI candidate from Lahore said similar things on Hum News(he is in Sugar mill owner and cousin of JKT).

2) Now its clear exporters/textile/import-substitution sectors are actually happy with what Asad did so far. So who was unhappy? Probably stock market guys(they would want a swift IMF deal irrespective of conditions) and import linked businesses(which is bulk of our business community and have taken the hit from Asad's export leaning policies).

3) There is news also that AU and JKT had a spat. AU wanted to end a subsidy for Sugar-Mills(around 50-60bn) that he felt was just going in pockets of Sugar Mill owners. JKT is one of the biggest sugar tycoon.

4) JKT funded PTI social media guys(Farhan Virk and co) started a smear campaign against AU soon after his sacking despite the fact AU left very gracefully without uttering a single word against IK or PTI.

5) News is that a committee composed of Shaukat Tareen(I think he is also relative of JKT) and few other guys will now advise IK on economic decisions. And JKT is going to be convener of that committee.

So now connect the dots and you will feel apprehensive that IK has caved in and surrounded himself with JKT and his guys. I am not very hopeful that with such advisors IK will make the right decisions.

 

[Samlee]

this simply shows how this crisis was artificially created and was corrected without any major changes

a CAD of 2-3% of GDP is normal phenomena for any developing country which mean by end of next year we would have solved the fiscal crisis, this artifically vreated crisis has hurt pakistan growth, had previous two govt refrained from doing so pakistan would have been growing by 5+ by now

Well The Changes Were A Bit Painful But Necessary.It Just Goes To Show That Asad Umar Was Doing The Job.

It Is A Pity That IK Got Into The Propaganda and Blackmailing Of The Corrupt Media That Was Unhappy That Asad Umar Had Finished The Bhatta They Got In Shape Of Advertisements

 

[Kambojaric]

And to have done it so fast is impressive. Yes the GDP growth rate will suffer this year and probably next year as well but somebody had to take these unpopular measures to build a foundation. Growth with no solid base means eventually all of it is undone. It is still early days to be content and exports have to be increased significantly, but the early signs are good despite all negative coverage and propaganda.

 

[dilpakistani]

Sacking Asad Umar is khan's blunder and he was dillusioned in to believing that Asad umar is doing bad

 

[PakSword]

this simply shows how this crisis was artificially created and was corrected without any major changes

a CAD of 2-3% of GDP is normal phenomena for any developing country which mean by end of next year we would have solved the fiscal crisis, this artifically vreated crisis has hurt pakistan growth, had previous two govt refrained from doing so pakistan would have been growing by 5+ by now

Only problem is the loan.. which we can't pay back unless we reverse the CAD. We need 5-10 billion dollars positive current account which means that if we reduce our imports by a 7-10 billion and increase exports by 7-10 billion, we will be making and overall profit of 7-10 billion USD.. enough will be available for return of loans and development projects (which will add to the GDP)..

 

[newb3e]

Only problem is the loan.. which we can't pay back unless we reverse the CAD. We need 5-10 billion dollars positive current account which means that if we reduce our imports by a 7-10 billion and increase exports by 7-10 billion, we will be making and overall profit of 7-10 billion USD.. enough will be available for return of loans and development projects (which will add to the GDP)..

our biggest industry textiles in 30% dependents on imports not including machinery.

our industrialist cry all the time about utility costs but they have done nothing about increasing their efficiency specially khi textile industry is still running on 1980s tech most of the industrialist llost the motivation to invest for multiple reason
1 they became greedy and started gambling on real estate (every businessman is greedy cant blame them) but real estate has actually destroyed khis economy and it was more like a casino trade then actual business deal.woh kehtay hainnna aissay chakkay lagay key koi aur kaam samjhe he nai ayya then moving money to dubai illegally from your main business industry require regular injection of capital to increase efficiency but khi businesses start taking mobey out of ibdustry and into real estate ajd dubai.exchanging enpty land for crazy money and not actually building anything on it is not good for economy its like parking money into an asset that wont generate economic activity nd whatever profit they made they moved to dubai.
2: mqm ppp fauji mafia made life impossible for people of khi and business were discouraged and stopped investing and khi being a industrial trading hub suffered resulting in economic collape if Pakistan.

govt need to facilitate industries and make a plan to cut depebdebcd on inports and manufacture in Pakistan.

 

[Zhukov]

our biggest industry textiles in 30% dependents on imports not including machinery.

our industrialist cry all the time about utility costs but they have done nothing about increasing their efficiency specially khi textile industry is still running on 1980s tech most of the industrialist llost the motivation to invest for multiple reason
1 they became greedy and started gambling on real estate (every businessman is greedy cant blame them) but real estate has actually destroyed khis economy and it was more like a casino trade then actual business deal.woh kehtay hainnna aissay chakkay lagay key koi aur kaam samjhe he nai ayya then moving money to dubai illegally from your main business industry require regular injection of capital to increase efficiency but khi businesses start taking mobey out of ibdustry and into real estate ajd dubai.exchanging enpty land for crazy money and not actually building anything on it is not good for economy its like parking money into an asset that wont generate economic activity nd whatever profit they made they moved to dubai.
2: mqm ppp fauji mafia made life impossible for people of khi and business were discouraged and stopped investing and khi being a industrial trading hub suffered resulting in economic collape if Pakistan.

govt need to facilitate industries and make a plan to cut depebdebcd on inports and manufacture in Pakistan.

Point Number 1 is exactly what has happened with Business community in Punjab as well.
Businessman wants to earn easy money and don't want to innovate. Plus Capital markets are so poorly structured they totally fail to provide sufficient funds to required deserving Entrepreneurs at favorable terms.
But tell you what. This Property Business is a Bank for Black money hoarding.
I explain how. Our Businessman does not declare all of his business with Tax Authorities (Excluding Exporters). If they are Earning 100 Rupees, only 60 Rs will be declared and processed via proper channels (Sales Tax Invoicing of Purchases and Sales, Cross Banking channels for Receipts and Payments etc) and 40 Rupees are earned without declaring i.e Cash Transactions, Sales purchase without invoices etc (Also known as Kacha Khaata).
Those 40 Rupees cannot be stashed into Banks (That FBR have Access now) So they Purchase Properties, Registry of the Property will show value of 10 Rupees, They will pay 10 Rupees out of their Declared income via Proper Banking channel and 30 from their Black Money (Undeclared income). Hence their black money is saved in those under valued properties. When they have to sale them same phenomenon happen. Thats why Registries are so less compared to actual Transaction value of lands. And why their Prices are so Absurdly high compared to the actual Return from any operation to which the land can be used in

 

[ps3linux]

If unnecessary imports decrease, foreign remittance exports increase CAD is surely going to decrease, but what I would like to see is the impact of deferred payment oil facility is it incorporated or excluded?

 

[aasimanwaar]

This is big achievement indeed.

Feel sad for Asad Umer..

 

[Peaceful Civilian]

Relax guys, give government time, give them 5 years. Things will improve .

 

[Syed1.]

I think you misunderstood me. I had been very vocal supporter of PTI govt till Asad Umar was sacked.

Yes may be(and I hope) Hafeez Sheikh continues or even does better than AU. But I am very apprehensive and I have good reasons to be apprehensive.

1) News coming from PTI-circles is that JKT and Abraj group CEO met IK while AU was in Washington for IMF deal and convinced IK that Asad isn't able to handle economy. He has needlessly delayed IMF and has brought economy to stand-still and there is uncertainty in business community and that he should be replaced with an economist. Humayun Akhtar PTI candidate from Lahore said similar things on Hum News(he is in Sugar mill owner and cousin of JKT).

2) Now its clear exporters/textile/import-substitution sectors are actually happy with what Asad did so far. So who was unhappy? Probably stock market guys(they would want a swift IMF deal irrespective of conditions) and import linked businesses(which is bulk of our business community and have taken the hit from Asad's export leaning policies).

3) There is news also that AU and JKT had a spat. AU wanted to end a subsidy for Sugar-Mills(around 50-60bn) that he felt was just going in pockets of Sugar Mill owners. JKT is one of the biggest sugar tycoon.

4) JKT funded PTI social media guys(Farhan Virk and co) started a smear campaign against AU soon after his sacking despite the fact AU left very gracefully without uttering a single word against IK or PTI.

5) News is that a committee composed of Shaukat Tareen(I think he is also relative of JKT) and few other guys will now advise IK on economic decisions. And JKT is going to be convener of that committee.

So now connect the dots and you will feel apprehensive that IK has caved in and surrounded himself with JKT and his guys. I am not very hopeful that with such advisors IK will make the right decisions.

Very well said... I'm in the same boat as you. Very vocal PTI supporter but dismayed and disillusioned by Asad Umar's dismissal. To make matters worse Khan made Hafeez Saeed as FM who was Zardari's choice.