ISLAMABAD: Adviser to Prime Minister on Finance and Revenue Shaukat Tarin tried to allay fears on the current economic conditions, saying that the country was facing price escalation due to rise in prices of imported commodities.
“Inflation and import bill are connected and have same cause and that is international commodity prices,” Tarin said while addressing a press conference along with Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood.
“Inflation is imported and the reason for which is price escalation at international market,” the finance adviser said, asserting that in fact the domestic inflation has gone down by 4 percent as compared to last year. “The economic conditions will stabilise in the upcoming two to four months,” the finance adviser added.
The PM’s aide addressed the anxiety among the investors caused due to a historic high trade deficit. “India is also facing the same situation. Their trade deficit is $20 billion today compared to $10bn ten years ago. The reason for that is price escalation,” he added.
The adviser claimed that rising commodity prices in the international market have increased the import bill by $1.5 billion. He said that 72pc of the increase in petrol prices could be attributed to an escalation in global prices. He added that the Covid-19 pandemic also had an impact.
Taking over the presser, Dawood compared the the imports of October 2021 and November 2021 and said that the import bill went up from $6.3 billion in October to $7.5 billion in November, showing around $1.2 billion difference.
This difference, he said was witnessed mainly due to import of four commodities, including raw materials the imports of which grew by $252 million on Month on Month basis, petroleum products (oil, gas, coal) by $508 million, vaccine imports $400 million and edible oil $134 million.
Shedding light on soaring inflation, Shaukat Tarin said that the items whose prices increased were all imported goods. “Revenue is now 36% higher than last year,” he said, pointing out that domestic inflation is lower than last year.
Responding to a question, Tarin said the agreement with the IMF might have an impact in a few areas, but “at the same time, our revenues are also increasing”. He added the IMF was not asking the government to lift exemptions, saying it suggested that targeted subsidies could be provided to the masses.
Tarin’s press conference comes a day after the Pakistan Stock Exchange’s benchmark KSE-100 index lost 2,134.99 points or 4.71 percent to close at 43,234.15 points, the highest number of points in a day since March 2020.
Further, the trade deficit saw a steep rise of 162.4 percent during November, driven largely by a more than triple increase in imports compared to exports.
