Karachi, November 18, 2023 – Pakistan has incurred a substantial expenditure of approximately half a billion dollars on the imports of mobile phones during the first four months (July – October) of the fiscal year 2023-24, as revealed by official statistics.
According to data released by the Pakistan Bureau of Statistics (PBS), the import expenditure on mobile phones soared to $470 million during the July – October period of the current fiscal year, marking a significant increase from $226 million recorded in the same period of the previous fiscal year.
Analysts attribute this surge in import payments for mobile phones to the relaxation in payments to foreign sellers by the State Bank of Pakistan (SBP). The move by the SBP to ease payment procedures may have stimulated the increased import of mobile phones, contributing to the spike in spending.
It is noteworthy that Pakistan is currently grappling with severe pressure due to imbalances in foreign payments. In an effort to stabilize its economy, the country has implemented stringent measures to secure a $3 billion loan deal with the International Monetary Fund (IMF). These measures are aimed at addressing the challenges posed by the precarious external payment situation.
The strain on foreign reserves is evident, as the official foreign exchange reserves of the State Bank of Pakistan experienced a decline of $114 million. By the week ending November 10, 2023, the reserves stood at $7.397 billion, down from the previous week’s level of $7.511 billion. The central bank attributed this reduction in official reserves to external debt payments made by the government.
In the month of October 2023 alone, citizens of Pakistan made payments totaling $166 million to foreign sellers of mobile phones. This figure represents a staggering 152 percent increase on a Year-on-Year (YoY) basis and a notable 33.20 percent on a Month-on-Month (MoM) basis. The substantial rise in spending on mobile phone imports could potentially exacerbate the challenges faced by the country’s foreign exchange reserves.
Given the circumstances, there is a growing consensus among experts that the government needs to exercise caution and control unnecessary imports. The aim is to safeguard foreign exchange reserves and redirect resources towards more beneficial avenues that can contribute to the economic stability and growth of the nation.
As Pakistan navigates the complexities of its external payment situation, careful fiscal management and strategic decision-making become imperative. Balancing the need for economic development with the necessity of preserving foreign reserves will be a critical challenge for policymakers in the coming months.
