According to new data released by the State Bank of Pakistan (SBP), there has been a fall in the imports of Completely Built Units (CBU) of cars due to the regulatory restrictions on car imports under the gift and baggage schemes.
As per the SBP’s report on the Pakistan Economy,
As a result, overall transport imports fell to a 10-year low in first half (July – December) 2019/2020.
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The central bank said that the import demand by the transport sector had taken a hit as the automakers were looking at a decrease in sales; they had been forced to raise prices due to devaluation.
The manufacturers reacted to the low demand by scaling back production which resulted in a fall in imports of CKD kits and auto parts. The fall in auto production has also impacted the steel industry where the demand for imported finished products has fallen.
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The fall in the import of cars also had a negative impact on the collection of customs duty as they fell by 2.8% in the first half of the current fiscal year.
