The government is expecting a drastic decrease of $2-5.5 billion during July 2022 in the import bill.
This was revealed during a press conference by Finance Minister Miftah Ismail in Islamabad.
Breaking down the imports of the previous month, Miftah said that the total imports stood over $7.4 billion in the previous months from which $3.7 billion was paid for the import of fuel whereas $3.7 billion had been expended on the import of other goods. However, the import bill had been reduced to only $2.6 billion till 18 July of the current month, guaranteeing an import bill of only $5.5 billion by the end of July 2022.
Minister Ismail explained that this reduction in imports was realized by creating a balance between imports and exports. In doing so, the government imposed strict rules on imports, which included a ban on the import of cars, mobiles, fridges, and other consumer goods. However, the government had allowed the imports of these goods on payment of duty.
Commenting on the fuel subsidies provided by the previous government, he stated that some individuals had been hoarding diesel as a subsidy of Rs. 70 had been provided, which had led to high imports of fuel, which had, in turn, caused the import bill to increase. He informed that normally, the country had 6-7 days of diesel stock, which had increased to 60 days.
Responding to a question about the depreciating value of the rupee against the dollar, Minister Ismail said that the dollar value has risen globally, and not just in Pakistan; the Euro and the Yen have also depreciated against the dollar to a record increase in 22 years. He remarked that the recent deprecation in the currency is due to the political situation rather than an economic problem and opined that there is no economic reason for the recent depreciation in the value of the rupee.
Minister Ismail lauded the government’s recent decisions and stated that the trade-economic fundamentals have improved. He added that the government is trying to balance the imports and exports, which will lower the current account deficit and stabilize the currency.
Responding to the media’s questions, the minister claimed that the economy is moving towards stability and that things will smooth out after August. He also mentioned that the real effective exchange rate is depreciative, and the government policies were stabilizing the economy.
Minister Ismail also revealed that the ECC had also approved the import of two lakh tonnes of urea at $500 per unit instead of the actual price of $600.
He told the media that the International Monetary Fund (IMF) had asked to increase only the base tariff. Prime Minister Shehbaz Sharif had initially disagreed with the increase but later accepted it as 50 to 60 percent of the consumers of the household tariff will not be subject to the increase. The government has filed a petition in this regard, and it is being reviewed by the National Electric Power Regulatory Authority (NEPRA).
The Finance Minister assured the media that the economy was improving and things would smooth out after August.