KARACHI: Government’s tough reform measures are likely to help contain current account deficit at $5-6 billion by the end of current fiscal year and support the economy that has been hurt by slow growth, an advisor said on Friday.
“Exports are increasing, more importantly exports of value-added products are increasing, and imports are declining, while current account deficit has significantly reduced,” said Abdul Razzak Dawood, advisor to Prime Minister on Commerce and Industries. “Economy is moving in the right direction.”
The current account deficit shrank 73 percent to $579 million in July as compared to $2.13 billion in same period of 2018-19. A downward trend witnessed throughout 2018-19 when the deficit stood lower 31 percent to $13.58 billion, from $19.8 billion in fiscal 2017/18.
Dawood, speaking at the launching ceremony of two new manufacturing lines at Dawlance Arcelik Pakistan, said the government had streamlined duty and tax structure to improve ease of doing business.
“In the next budget duty and tax structure would be improved further to facilitate industrial production and exports,” the advisor added. Referring to establishment of four new industrial units in Port Qasim Industrialisation Zone, Dawood said the country previously faced “a de-industrialization type situation.”
“But, now we are back in industrialisation mode as the government is supporting industry for exports as well as for import substitution.”
The advisor said Pakistan had been relying too much on textile sector, and it was time to focus on other products especially engineering products along with chemicals, appliances and information technology.
He said the country already had market access to China, Europe, Indonesia, and Qatar for engineering products while “efforts are underway for market access to US, Canada, Japan, Korea and Australia”.
To a question about China Pakistan Economic corridor (CPEC), Dawood said several delegations from China had been coming to Pakistan and they were interested in shifting the industry here.
“A delegation comprising 65 companies will be coming on October 24, 2019 to explore and evaluate investment opportunities.” Meanwhile the advisor inaugurated two new production lines – one for manufacturing automatic washing machines and one for manufacturing water dispensers of Dawlance.
The company said the products manufactured on these modern lines will also be exported to other countries, ensuring strict compliance to European standards of quality and energy-efficiency.
Dawlance is a fully owned subsidiary of Arçelik – the largest Turkish enterprise, which is also the third-largest manufacturer in Europe. Since the acquisition of Dawlance in 2016, Arçelik has invested more than $60 million in Pakistan, to upgrade its production facilities and product quality, while also building a state-of-the-art R&D capability in Pakistan to innovate newer technologies.
Umar Ahsan, chief executive officer of Dawlance Arcelik in Pakistan said the company has increased volume of value added exports from Pakistan. “Inspired by the great business opportunities emerging in Pakistan we will continue to invest in Pakistan and explore new markets abroad,” Khan said.
“Arcelik is among the most prominent names in the list of global investors who are contributing towards enriching Pakistan’s economy and enabling the country to become a globally competitive producer of technology goods. This is an inspirational initiative for other business enterprises in Pakistan, to work with optimism for overcoming the current economic challenges.”