Prime Minister Shehbaz Sharif on Thursday said that the decision to ban the import of luxury items will save the country’s precious foreign exchange, vowing to take similar measures to overcome the economic challenges at hand.
“We will practice austerity and financially stronger people must lead in this effort so that the less privileged among us do not have to bear this burden inflicted on them by the PTI government,” PM Shehbaz said in a Twitter post.
My decision to ban import of luxury items will save the country precious foreign exchange. We will practice austerity & financially stronger people must lead in this effort so that the less privileged among us do not have to bear this burden inflicted on them by the PTI govt.
— Shehbaz Sharif (@CMShehbaz) May 19, 2022
He added: “Together we will overcome all the challenges with resolve and determination, InshaAllah!”
Shortly after the PM’s tweet, Information Minister Marriyum Aurangzeb told media persons in Islamabad that the ban on the import of 38 non-essential luxury items had been announced under an “emergency economic plan”.
She explained that the banned items were the ones that were not in the use by the public, identifying “imported vehicles” as one of them.
She assured the nation that the premier is working tirelessly with the aim to “stabilise the economy”.
Marriyum further explained that the nation would have to make sacrifices under the emergency situation, saying the impact of such bans would be approximately $6 billion.
According to the Pakistan Muslim League-Nawaz (PML-N) leader, the reduction in the dependency on imports would have a positive impact on the current account deficit. “We have the capacity and the experience to fix the current economic issues.”
A day earlier, the prime minister gave the go-ahead to a temporary ban on the imports of around three-dozen goods – essential and luxury items – but refused to slap regulatory duties to curb imports.
He also permitted to limit the imports of many goods — including completely knocked down (CKD) cars and mobile phone kits — by half of the last month’s imports, sources privy to the meeting had revealed to The Express Tribune.
The decision to ban certain goods and impose quantitative restrictions on others will be temporary, only for two to three months, according to a senior government functionary.
The government will face a challenge to secure the IMF’s nod for placing restrictions on imports. It will also have to notify the World Trade Organization about the measures and the global free trade body then seeks the IMF’s input on whether Pakistan’s economic conditions warrant such drastic measures.
The estimated monthly impact of the measures is not more than $300 million, indicating that the government is not in a mood to severely curtail economic growth in the new fiscal year leading to the next general elections.
Also read: Govt bans import of essential & luxury items
PM Shehbaz did not accept the proposals to increase regulatory duties on imported goods and also rejected recommendations to ban the import of cheese, chocolates and other foods largely imported from Europe.
The European Union is Pakistan’s single largest export destination and helps Islamabad earn additional dollars through the GSP plus tariff reduction scheme.
However, such food items will be subjected to quantity restrictions aimed at lowering the country’s reliance on the goods to the extent possible without irritating the largest export destination’s partner.