It has been noted that the imports in Pakistan are surged after seeing a surge in demand for goods for local consumption and exports. Therefore Pakistan continued to import food, energy, machinery, steel, cotton, and cars in order to control inflation and to give support to the Economy. According to the Pakistan Bureau of Statistics (PBS), the import of the mentioned items grew by over 500% in dollar-value terms during the month of January this year. When it comes to the overall imports scenario of Pakistan it increased by 17% to $4.82 billion in January compared to $4.12 billion in the same month last year. It is also anticipated that the imports may remain high, going forward, to help the economy recover from the adverse impact of the Covid-19 pandemic as the country’s economy is largely dependent on imports. On the other hand, the surge in imports is also a concern since can come up with a high cost for the country’s foreign exchange reserves.
The continuously rising petroleum oil prices in the international markets would further add pressure on the balance of payment, as the country relies heavily on imported energy. It is also noteworthy to mention that creating import substitution through encouraging local production of raw materials like fertilizer for agriculture and cotton for textiles, and resolving grave issues in the agriculture economy to again become self-sufficient in food items like wheat and sugar may help the country improve its balance between international payments and receipts. Imports are a big component in the balance of payment of Pakistan.
The revival in oil prices to a 13-month high at $60 per barrel at present is going to increase the energy import bill of the country, going forward.
Import of food items like wheat and sugar may drop in the times ahead following the start of local production of the two commodities. The government has allowed the import of several food commodities in order to bridge gaps in demand and supply as well as to control inflation.