Maintaining that economy was moving on positive direction, Advisor to Prime Minister on Revenue and Finance, Shaukat Tarin said Friday that the country was facing escalation in import bill and inflationary pressure due to surge in prices of imported commodities.
“The inflation and import bill are connected and have same cause and that is international commodity prices,” the adviser said while addressing a press conference along with Advisor to Prime Minister on Commerce and Investment, Abdul Razak Dawood.
The adviser said the country was witnessing inflationary pressure due to rise in international prices of commodities which it was importing, citing that the prices of fuel, LNG, coal, steel and edible oil rose in international market and have impact on inflation in Pakistan.
Comparing the imports of October 2021 and November 2021, the adviser 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.
Read more: The inflation debate in Pakistan
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 while imports of petroleum products (oil, gas, coal) grew by $508 million, vaccine imports $400 million and edible oil $134 million.
He said that despite the fact the vaccines were totally funded by donnors, it is reflected in the import bill.
He said all other countries were also affected by international commodity prices adding that the import bill of neghbouring country India had also doubled to $ 20 billion due to rise in international prices.
The adviser said that the imports into the country have increased more in terms of value and less in terms of volume.
He said, there was 72 percent increase in imports of petroleum products in terms of value and only 11 percent in terms of volume.
KSE 100 crashed today because of 3 bad news from 1st December.
1. Inflation touched 11.5%
2. Imports touched all time high, quite clear why RS touched 175 – not IMF this is because of us
3. Bond's jumped to 11.5% for 6 months, signaling interest rate will increase sharply #PSX
— Economy of Pakistan (@Pakistanomy) December 2, 2021
Likewise, crude petroleum imports increased 86 percent in value and only 5 percent in quantity while palm oil and soya bean increased 75 percent in value and only 5 percent in volume. Same was the case with pulses, which grew by 34 percent in value and only 5 percent in quantity.
The adviser said that the situation would not last and expressed the hope that this disequilibrium would end soon and commodity prices would come down in the international market and consequently have impact on commodity prices in Pakistan.
On the other hand, he said that fundamentals of economy were on strong footing as revenues have witnessed 36 percent growth, including 32 percent increase in income tax, which shows the growth, was all across the board.
Likewise, electricity consumption increased along with growth in agricultural production, he said adding as long as economy was growing, there was no need to worry.
He said that the government was cognizant of problems faced by the poor and lower middle class and was trying its best to help them cope with the inflationary pressure through Ehsas and Kamyab Paksitan program.
Meanwhile, speaking on the occasion, Abdul Razak Dawood said that the country’s exports were witnessing record increase and the reason for which is growth in raw material imports.
He said that the country’s imports including textiles; yawn and home appliances increase both in quality and value to achieve the annual target of export.
Razak Dawood said that in previous months of November the country’s exports recorded highest growth and climbed up to $ 2.9 billion. Earlier, in October 2021, the exports stood at $2.7 billion.
He expressed the hope that the exports would go up to $3 billion in December 2021.