KARACHI – President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain on Monday said that the State Bank of Pakistan has increase policy rate by 1.5 percent to 10 percent, effective from December 3, 2018. In October 2018, the general inflation rate has increased to 6.8 percent while the estimated inflation rate for the FY 2019 was set to be 5.2 percent. Keeping the economic indicators and increase in price of utilities including gas and electricity, it is expected that inflation will further rise by 3 – 4 percent.
The Veteran Business Leader while talking to the business community said that with constant increase in policy rate, the economic activities are shrinking in the Country. The higher inflation due to certain reasons is directly affecting the purchasing power of masses. Instant policy measures are required to control the trade deficit. The frequent depreciation in USD highly affects the business opportunities and cost of doing business. Rupee depreciation needs immediate remedial measures; if PKR is not stabilized the business markets will go on further shrinking and inflation will further rise which will last drastic impacts on all sectors including trade and industry. Government and financial institutions should form short and long run policies simultaneously. Problems pertaining to export sector need early consideration in order to control and minimize the trade deficit and get economy on the developing track.
The Former Minister said in the first four months of current fiscal year the remittances and exports are improved by 15 pc and 3 pc respectively, however due to increasing imports of oil the current account deficit is accumulated to $ 5 billion which is 28 percent higher than the same period of previous year. Given to the ongoing economic crisis industrial production and exports will be reduced and large scale manufacturing will be highly affected; the growth rate of LSM in the current fiscal year is already negative by 2 percent.
Mian Zahid Hussain said that rupee devaluation is now a routine. USD reached to Rs. 136 in the open market and experts anticipate a further valuation of dollar. If timely efforts have not been made for rupee stability, it will further decline.
Mian Zahid Hussain said encouraging local and foreign investors is of significant importance and need of time. To get Pakistan out of the ongoing crisis, it is important to promote the industrial, agriculture, trade and services sectors of the Country. Stable and firm economic policies should be implemented to restore the investors’ trust and eliminate the impact of unstable economy in the Country.