Pakistan takes U-turn, resumes imports of luxury items
Jul 30, 2022
Islamabad [Pakistan], July 30 : In a reversal of its earlier ban on the import of luxury items, Pakistan's federal cabinet on Saturday approved a decision by an economic committee to unban the imports, media reports said.
It is worthy to note that the Pakistani government earlier scurried to ban the import of luxury items due to an alarmingly high trade deficit.
After the Economic Coordination Committee (ECC) reached a decision to lift the ban on the import of luxury items, the federal government approved the same, reported ARY News.
According to details, the ban on the import of luxury items such as cigarettes, chocolate and juices such as cosmetics, tissue papers, pet food, fish, footwear, fruits and dry fruits has been lifted.
Pakistan's Commerce Minister on May 20 notified a ban on the import of 38 non-essential luxury items under an "emergency economic plan".
Estimation is also building that goods like furniture, ice creams, jams and jellies, leather jackets, shampoo, sunglasses, ketchup, arms and ammunition, pasta, musical instruments, frozen meat, door and window frames, decoration articles, travel bags, suitcases, crockery and corn flakes can also be imported after lifting of the ban.
At the time of banning the import of luxury items, the country's Prime Minister Shehbaz Sharif had said that the decision was aimed at saving the country its precious foreign exchange.
He has also lambasted former Prime Minister Imran Khan's party PTI's "bad governance" which pushed the country into an economic mess.
In a tweet, Prime Minister Shehbaz Sharif said, "My decision to ban the 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."
Meanwhile, Pakistan is currently battling with its fast-exhausting foreign currency reserves and widening fiscal and current account deficits, along with a rupee that has lost almost 20 per cent of its value in just 7 months since January 2022.
State Bank of Pakistan's reserves has fallen to as low as USD 9.32 billion, hardly enough to pay for 45 days of imports. The red line for SBP foreign currency reserves is USD 7.5 Billion to avoid "default".
Pakistan's political instability threatens to derail efforts to regain the confidence of key lenders. The country's currency endured its worst week in more than two decades, reflecting investors' worries that the country risks following Sri Lanka to become the next emerging economy to default on foreign repayments.
