ISLAMABAD, Pakistan: Pakistan has banned the import of all non-essential luxury goods in an effort to stabilize the economy, describing the situation as an economic emergency, according to information minister Marriyum Aurangzeb.
The move comes as Pakistan’s current account deficit has spiraled out of control and its foreign exchange reserves have tumbled, while its currency, the Pakistani rupee, has crashed to historic lows against the U.S. dollar.
“All those non-essential luxury items that are not used by the wider public have had a complete ban been imposed on their import,” Aurangzeb told reporters, adding that the measures are meant to address fiscal instability, which she blamed on the previous government of ousted Prime Minister Imran Khan.
Cars, cell phones, home appliances and cosmetics are among the imports to be banned.
According to Aurangzeb, along with other fiscal measures, the move would help save critical foreign exchange reserves for the next two months, with savings of $6 billion annually.
However, Pakistan’s major imports, fuel, edible oil and pulses, will remain unaffected.
Amidst a growing import bill and surging global commodity prices, Pakistan’s current account deficit this financial year has reached some $17 billion, or over 4.5 percent of GDP, according to some projections.
Pakistan’s foreign currency reserves have also declined rapidly, with funds held by the central bank falling $6 billion from $16.3 billion at the end of February to just above $10 billion in May.
Meanwhile, in the Qatari capital, Doha, Pakistan’s finance team and the International Monetary Fund have held talks to restart a funding program that began in 2019, which has stalled over Pakistan’s implementation of policy actions required to receive funds.
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