Daily Times

Prime Minister Shehbaz Sharif Thursday said the decision to ban the import of luxury items will save the country’s precious foreign exchange and pledged similar measures to overcome the economic challenges facing the country. “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,” he said in a tweet. “Together we will overcome all the challenges with resolve and determination, InshaAllah!” 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. 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, says a news report.

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.

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.