ACCORDING to State Bank statistics, the country has suffered a trade deficit of almost $16bn in the first nine months of the year (July 16 to March 15). Exports and imports are moving in just the opposite direction. While exports are on a decline, imports have risen significantly despite lower international commodity prices.

Exports cover only 53pc of total imports. This should create ripples in the corridors of power. The country’s trade gap for the whole year is expected to go up to $ 21-22bn.

It appears that the country’s economy is transitioning into an import-driven economy, mostly for consumption purposes. The negative performance in exports means that sufficient surpluses for exports, in agriculture and manufacturing sectors, are not available due to low output.

The importers lobby and the trading community have had a powerful influence on decision-makers, and government policies benefit them. The industrial sector is performing poorly as it is not being protected from unbridled imports. Trading has become more profitable and less risky than manufacturing.

Independent economists agree that the economy is in dire straits despite claims of improvement by the ministry of finance. Unless urgent restructuring measures are taken, the country may sink further into deeper economic crisis.

Kulsoom Arif
Karachi

Published in Dawn, April 21st, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play