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$12.8bn trade deficit this year

ISLAMABAD: Trade Policy 2007-08 promising huge subsidies and export facilitation measures has been announced.

The policy aims at a trade deficit of $12.8 billion with an export target of $19.2 billion and import projections of $32 billion. The export target of 19.2 billion is 12.86 percent higher than the actual realised exports in last fiscal year of $17.01 billion, against targeted $18.4 billion. The import target of is 4.9 percent higher than the actual imports of the last fiscal year of $30.5 billion, against a target of $28 billion. Trade deficit of $12.8 billion is 5.11 percent higher than the actual trade deficit of $13.49 billion for the outgoing fiscal year 2006-07, against a target of $9.4 billion.

According to the export measures announced in the Trade Policy 2007-08, the scope of the Long Term Financing for Export Oriented Projects has been enlarged to cover export oriented core and developmental sectors, purchase of locally manufactured machinery and compact spinning. To encourage investment and facilitate exports the government plans introduce a scheme of Export Oriented Units, with essentially the same incentives as available to units in the EPZs. The policy also envisages the establishment an equity fund through pooling the resources of private and public sector organizations for Brand Acquisition.

The government has also decided to allow first year allowance (FYA) on investment in plant machinery and equipment (PME), to be set off against statutory income in the year of assessment. The government has also decided to provide 50 percent cost sharing to exporters in their media promotion plan and 50 percent cost of shelf space for in leading retail outlets. sajid chaudhry

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