Karachi, March 16, 2024 – Official data released by the Pakistan Bureau of Statistics (PBS) indicates that Pakistan has expended a substantial $1.15 billion on the import of mobile phones during the first eight months (July – February) of the fiscal year 2023-24.
This figure represents a significant surge compared to the corresponding period of the previous fiscal year, where imports stood at $448 million, marking an impressive growth rate of 156 percent.
The surge in mobile phone imports raises concerns amidst Pakistan’s ongoing economic challenges, particularly regarding the balance of payments. The country faces pressures from higher external payments coupled with a shortage of dollars domestically.
Notably, the foreign exchange expenditure on mobile phones nearly matches the tranche requested from the International Monetary Fund (IMF) under stringent conditions. Currently, an IMF team is in Pakistan to conduct a review of the second round of the loan program. A successful review could unlock $1.2 billion, constituting the next tranche of the $3 billion Stand By Arrangement (SBA).
The significant outflow of foreign exchange towards mobile phone imports underscores the urgency for careful economic management and diversification of revenue sources.
Experts attribute the surge in mobile phone imports to multiple factors. Firstly, there has been a notable increase in financial transactions conducted through mobile devices, reflecting the growing reliance on digital platforms for commerce and banking services. Additionally, the persistent demand for mobile phones, particularly among the youth demographic, has contributed to the upward trajectory in imports.
In terms of Pakistani Rupee, the import of mobile phones witnessed an even more substantial surge, recording a staggering 220 percent increase to Rs. 326.76 billion during the first eight months of the current fiscal year, compared to Rs. 102 billion in the corresponding period of the previous fiscal year.
The surge in phone imports may partly be attributed to the depreciation of the Pakistani Rupee against the US Dollar. According to PBS data, the conversion of rupee value into US Dollars is based on the monthly floating average exchange rates provided by the State Bank of Pakistan (SBP).
For February 2024, the exchange rate was recorded at 1$=Rs. 279.181670, while for January 2024, it stood at 1$=Rs. 280.320611. In comparison, the exchange rate for February 2023 was notably lower at 1$=Rs. 266.676437.
As Pakistan navigates its economic landscape, the surge in mobile phone imports underscores the need for prudent fiscal policies and measures to address the challenges posed by external payments and currency fluctuations.
