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 an agreement with the IMF will prevent bankruptcy.
The deal will stabilise economy to some extent but the whole population will be affected as the economy will shrink at a fast pace, he said.
Mian Zahid Hussain said that price hike and borrowing will continue which will reflect badly on the limping economy.
Talking to the business community, he said that the government has reached a staff level agreement with the IMF and it has started implementing strict preconditions of the international body.
The IMF board can ratify the deal in the month of January, after which the threat of bankruptcy of the country will be temporarily averted, he said.
The veteran business leader said that for some time, the rupee and the economy will be stable, but continued rise in prices of electricity, gas, petrol and other commodities will make life difficult for the people.
The agreement will reduce production, employment and exports and the economy will start shrinking, which affects 22 crore people as the lender will become more stringent with the passage of time due to frequent breach of promises and non-compliance with the wishes of Western countries in some cases.
The government will gladly cut several hundred rupees in development expenditure but will never compromise on its princely expanses, he said, adding wasteful expenditures to woo voters and politicians will increase as election approaches and all expenses will be taken out of the pockets of the poor.
Mian Zahid Hussain said that only after approval of loan installment from IMF other countries and international investors would be willing to lend to Pakistan while loans could be taken from the international bond market at high interest rates and in the near future.
The downturn will continue because the rulers have never been serious about the economy but have been more interested in creating a baseless impression of the country’s development through statistical manipulation.
The economic condition of the country has been deteriorating continuously since 2018 and the development of the country is being touted by giving incentives to different lobbies.
Gas tariff for captive power plants has been increased by $2.50 which will increase the production cost and many Pakistani products will lose their competitiveness in the international market.
Mian Zahid Hussain said that the only solution to get the country out of the economic quagmire is to eliminate losses through privatization, and contain energy theft and improve governance.