Former Vice President of FPCCI Atif Ikram Sheikh on Monday expressed concern over
decreasing foreign exchange reserves.
The export, remittance, and investment situation is also worrying calling for urgent
measures to stabilize the economy to prevent further weakening of the rupee, he said.
Talking to businessmen, he said that full focus on reducing the current account deficit
alone cannot improve the situation.
Atif Ikram Shaikh, who has also been the former chairman of PVMA, said that exports
and remittances are decreasing due to the gas crisis, inflation, and recession in western
countries.
The reason for the decrease in domestic and foreign investment is political instability
which is a great source of distress among businessmen,
He said that to the decrease in foreign exchange reserves, the rupee continues to weaken,
so the government will have to try to increase exports and decrease imports.
Due to the ravages of floods, the government will have to import wheat, cotton, and other
food items on a large scale, which will widen the current account deficit, he said.
He observed that the textile industry earned nineteen billion dollars in foreign exchange
last year and this year it needs cotton or its income will fall.
He said that oil prices in the international market are gradually declining; however, the
sitting government should pass on the benefit to the consumers. Oil price was $94 per
barrel in the first week of November and now it has reduced to $74 per barrel.
Consumers are being taxed by Rs36 billion of Petroleum Development Levy, inflation
(CPI) rose to 23.6 percent with the core inflation at 14.5-18.5 percent, and the inflation is
likely to go up further, as the government has decided to increase gas prices and impose
more taxes, as the government is running short on revenues.
The government’s debt payments will increase as the SBP has increased the discount rate
by 100 basis points and the IMF is also demanding additional taxes of Rs.800 billion, he
mentioned.
He urged the government to provide relief to the people and immediately restart incentive
schemes.
He noted that exports may further hurt as exporters’ LC for raw materials and
intermediate goods are not being opened due to a shortage of reserves.
