KARACHI – Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Friday said challenges to the battered economy are increasing.
Problems are increasing as compared to facilities which have raised concerns among the business community as some sectors are showing signs of decay, he said.
Mian Zahid Hussain said that according to government’s statistics, Large Scale Manufacturing (LSM) has gone down by 20 percent from January to May while the private sector has reported a fall of 33 percent.
Talking to the business community, the veteran business leader said that the incentives given to LSM ended in the month of December resulting in a fall of production and now it is at the same spot where it was in September.
He said that facilities provided to the auto sector can improve LSM growth as it has a good share in this sector.
The business leader noted that current account deficit was 8.56 billion dollars in 2019 which jumped to $245 million surplus in 2020 but started its journey in deficit in 2021.
The deficit was $274 million in first three months of 2021, it was $188 million in April and $632 million in July meaning that the total current account deficit up to the month of May was over one billion dollars.
From July to May, the trade deficit has jumped by 26 percent which will increase and may touch the mark of 40 to 45 billion dollars in the new fiscal.
The industrial improved on the back of relaxations but it has not resolved the issue as the buying power of the masses has been damaged due to the prices of flour, sugar, and petroleum prices.
He warned that the price of petrol may jump by Rs30 while power tariff see a hike of Rs5 per unit in the days to come which will be a doomsday scenario.
Growth through artificial steps can increase trade deficit to an extent where the country will have to borrow to save forex reserves which will further complicate the situation, he warned.
