ISLAMABAD – Pakistan needs $9.25 in debt repayments during the currentfiscal year which would be a challenge.
The amount needed to pay foreign debts and interest is almost equal to theforex reserves held by the central banks warranting foreign loan to keepthe country afloat.
Serious efforts are needed to control imports otherwise the deficit canjump to 25 billion dollars making it very difficult for the government tomanage, said Patron Islamabad Chamber of Small Traders Shahid RasheedButt.Increasing interest rates will be a hard decision as it will startcontraction in the economy at this critical juncture, he added.
Shahid Rasheed Butt said that the tested recipe for controlling deficit hasremained a cut in the developmental spending. However, the government canexplore the option of jacking up the slab of 20 percent to 30 percent onimports.
He said that the proposal for an increase in income tax should not beaccepted as it will trigger evasion and corruption as the former governmenthad already added over one trillion rupees to the burden on taxpayers.
The business leader said that the new government should push its reformagenda without considering opposition by defeated elements as the massesand the business community is with it.