Pakistan’s current account deficit has spiraled out of control and its foreign exchange reserves have dwindled while the Pakistani rupee has hit historic lows against the US dollar.
Minister Miriam Aurangzeb told reporters that “imports of unnecessary luxury items that are not used by the general public have been completely banned.”
He said the measures were aimed at tackling financial instability, which he blamed on the previous government of Prime Minister Imran Khan, who was ousted in a no-confidence vote last month for allegedly mismanaging the country’s economy.
He said the country is in a state of emergency.
Import bans include cars, cellular phones, home appliances and cosmetics.
It was not immediately clear how long the ban would last, but Aurangzeb said it, along with other financial measures, would help preserve significant foreign exchange reserves for the next two months. He said the measures would save 6 billion annually.
Pakistan’s main imports are fuel and edible oil and pulses, which will not be affected.
Some estimates put Pakistan’s current account deficit at around 17 17 billion this fiscal year, with an inflated import bill above 4.5% of GDP and rising global commodity prices.
Pakistan’s foreign exchange reserves have plummeted: central bank funds have fallen from $ 16.3 billion at the end of February to just $ 10 billion in May.
Pakistan’s finance ministry is in talks with the International Monetary Fund (IMF) in Doha, Qatar, to resume a funding program that began in 2019, but has stalled due to the implementation of Pakistan’s necessary policy measures to raise funds.