The President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Irfan Iqbal Sheikh, on Monday expressed concerns over the distress faced by the private sector in Pakistan.
The distress has been caused due to several factors such as high key policy rate, extreme volatility in the rupee-dollar exchange rate, lack of transparency and consultation in economic policymaking, absence of support packages for the aftermath of natural disasters, and multiple rounds of major upward revisions of electricity and gas tariffs.
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According to Sheikh, the confidence of businessmen in the government policies has evaporated, and the handling of the International Monetary Fund (IMF) program has brought all economic activities to a standstill. The FPCCI Chief also highlighted that exports have declined by 15 percent in eight months of the current fiscal year, remittances down by 20 percent (except in March 2023), and the Asian Development Bank (ADB) and the World Bank have projected Pakistan’s economic growth at 0.6 percent and 0.4 percent, respectively, for FY23.
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Furthermore, Sheikh emphasized that no reliable data is available on the current state of unemployment in the country, the gap between inter-bank and open-market continues to remain unstable, and containers are still not released smoothly. He questioned the government’s seriousness in bringing transparency and consultation in economic policymaking and demanded answers to two sets of questions for businesses to plan their year ahead: (i) what factors are impeding the IMF deal, and what the government is doing about it, and (ii) what steps will be taken after the resumption of the IMF program to stabilize the economy, and how and when the government plans to take the business community into confidence on these steps.
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Moreover, Pakistan’s domestic debt has climbed up to 27 trillion rupees, which has battered the ability of the government to invest in infrastructural development, promoting industrialization, providing targeted subsidies to export-oriented industries, and social uplift avenues. The FPCCI Chief warned that upping the budgeted tax collection target of 7,004 billion rupees to 8,709 billion rupees on the dictates of IMF will further tax the already tax, instead of broadening and simplifying the taxation system. This scenario makes it impossible for any business to operate profitably, let alone investing in new industries for exports, import substitution, and employment generation.
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