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Floods More Hike Commerce Deficit Over Fears of Decline in Exports

Floods more likely to hike commerce deficit over fears of decline in exports

 

ISLAMABAD: Pakistan will be facing a commerce imbalance in the ongoing fiscal yr owing to devastating floods with deficit likely to hit US$3 billion.

According to sources in the finance ministry, the export target for the fiscal yr 2022-23 will likely not be achieved as Pakistan will face a decline in exports of fruits, vegetables, tobacco, cement, and leather merchandise.

“The exports in other key production sectors will also likely face a decline,” they said.

Alternatively, the nation might be compelled to import wheat, pulses, sugar, construction machinery and medicines. “This imbalance in exports and imports will likely hike the commerce deficit to US$3 billion,” they said while quoting a finance ministry document.

Earlier, a Finance ministry document has revealed that the economic growth in the country could fall below to 2.3 % in the ongoing fiscal yr 2022-23 after floods caused losses of overRs2,000 billion which included damages to lives, infrastructure, crops and livestock in the affected areas.

According to sources in the ministry, a new technique would have to be developed to move forward while keeping in view the losses and devastation from the floods.

The economy has suffered an Rs2,000 billion losses owing to floods and the inflation is likely to stay between 25 to 27 %, the report said. It highlighted that the growth price was set at 5 percent for FY2022-23 however, it seems tough to achieve targets set in the annual development plan.

The expansion in key crops may likely fall to 0.7 p.c from an expected goal of three.9 %, growth in industrial sector may drop to 1.9 % from an expected 5.9 p.c while growth in companies sector may decline to three.5 % from an estimated 5.1 p.c in the ongoing fiscal yr.

It shared that economy which is already facing points regarding balance of payment and debts will be hurt further from floods and it may result in hike in inflation. Help from friendly countries, and global development companions could be required to provide a serving to hand to the financial system, the report added.

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