Karachi, July 21, 2024 – Pakistan has recorded an unprecedented expenditure of Rs 535 billion on the import of mobile phones during the fiscal year 2023-24, as reported by the Pakistan Bureau of Statistics (PBS). This marks a substantial 291 percent increase from the Rs 137 billion spent in the preceding fiscal year.
In terms of US dollars, the import of mobile phones surged by 233 percent, reaching $1.9 billion in FY24 compared to $570 million in FY23. This significant rise in import expenditure has raised eyebrows and prompted an in-depth analysis by market experts.
Market analysts have pointed to several key factors contributing to this surge. Firstly, the depreciation of the Pakistani rupee has played a major role in inflating the cost of imports when measured in local currency. The weakening rupee has made imported goods, including mobile phones, significantly more expensive.
Secondly, the demand for mobile phones has been driven by the increasing reliance on mobile-based financial transactions. As more Pakistanis turn to digital banking and online shopping, the necessity for modern smartphones has grown, fueling higher import volumes.
Additionally, analysts have highlighted the easing of import restrictions as a crucial factor. During FY24, the government relaxed conditions for opening letters of credit (LCs), making it easier for importers to bring in goods, including mobile phones. This policy shift aimed to address supply shortages and support market demand.
Official data further reveals a dramatic year-on-year (YoY) increase in mobile phone imports. In June 2024 alone, imports surged by 420 percent to $279 million, compared to just $53 million in June 2023. On a month-on-month (MoM) basis, there was a 77 percent rise in imports in June 2024, up from $157.36 million in May 2024.
Analysts attribute this June spike to the anticipation of increased duties and taxes in the budget for 2024-25. Importers likely rushed to bring in mobile phones before the new fiscal policies took effect, resulting in a sharp uptick in import activity.
The soaring import bill for mobile phones underscores the challenges facing Pakistan’s economy, particularly regarding foreign exchange reserves and trade balance. While the demand for smartphones reflects a digitalizing economy, the heavy reliance on imports poses sustainability concerns.
In response to these developments, policymakers may need to consider measures to encourage local production of mobile phones. Such initiatives could help reduce dependency on imports, stabilize the trade deficit, and create employment opportunities within the country.
Tthe staggering Rs 535 billion spent on mobile phone imports in FY24 highlights both the growing demand for technology and the economic pressures from currency depreciation and trade policies. The coming fiscal year will be critical in addressing these challenges and exploring strategies to balance technological advancement with economic stability.