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 Wednesday said Pakistan’s weak economy is further affected by global conditions and persistent rise in political temperature in the country.
It would be better to resolve the issue of no-confidence as soon as possible as delay is intensifying the economic crisis, he said.
Mian Zahid Hussain said that the government expects a loan from the IMF but the lender is dissatisfied with the breach of promises which can lead to the termination of its program which would be a disaster.
Talking to the business community, the veteran business leader said that the termination of the IMF programme will make borrowing difficult for Pakistan from other sources.
He said that in the current unstable situation, investors have suspended their decisions while a large amount of capital is fleeing the country, which is causing the rupee to depreciate.
Flight of capital will result in inflation to increasing poverty while burdening the whole population, he observed.
Mian Zahid Hussain warned that political and economic instability will increase, the dollar will become more expensive, the rupee will depreciate further and the flight of capital from the country will accelerate and a new wave of inflation will increase the suffering of the people if political issues are not resolved soon.
The business leader said that the foreign exchange reserves were declining. 15 billion dollars have gone out of the country this year, while more than 400 million dollars have been sent out of the country in the month of March.
According to an SBP report, textile manufacturing has declined from 4.1% to 2.9% this year as compared to July-January last year. Food manufacturing fell from 29% to 3.4%, chemicals from 9.2% to 5.4%, pharmaceuticals from 10.3% to minus 3.5%, while automobiles and some other sectors have improved.
Exports from July to January, which were16.1 billion dollars last year, have reached 20.6 billion dollars this year, but their volume has not increased, but prices have risen. Imports, meanwhile, rose 49 percent from 32.1 billion dollars to 47 47.9 billion dollars hurting foreign exchange reserves but boosting FBR revenues. The current account deficit, which was negative one per cent last year, has risen to 12.1 per cent this year which is worrying, he said.