Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, All Karachi Industrial Alliance and former provincial minister Mian Zahid Hussain said the IMF loan is the key to other loans. A telephone call by COAS to the US official positively impacted the situation; the positive statements from the IMF improved the confidence of the Pakistani market, which has helped improve the case, he said.
Mian Zahid Hussain said that efforts of COAS have led to a fall in the dollar’s value by Rs15 in two days.
Talking to the business community, the veteran business leader said that politicians should not compromise the country’s future for their superficial interests.
He said that the current account deficit of the previous financial year had reached 18 billion dollars, about five percent of the GDP. The country imported vehicles worth four billion dollars, and agriculture imports remained at 17 billion dollars, increasing the GDP, but the trade deficit went out of control. There is a dire need to balance the payments permanently, he demanded.
Recent interest rate hikes and a ban on luxury goods have curbed imports, resulting in a 47 percent reduction in trade deficit in July, while the problems of the country’s importers, carmakers and motorcycle manufacturers increased.
Mian Zahid Hussain said there had been a drastic decrease in foreign direct and portfolio investment due to foreign investors’ lack of confidence. Foreign exchange reserves, which were 17.3 billion dollars at the beginning of the year, are now less than ten billion dollars, which is only enough for one and a half months of imports.
The minimum amount of these reserves should equal three months of imports. Suppose the economy is not stabilized in 2022-23 and continues to fluctuate similarly. In that case, the reputation of the country in the business community and the international community will be severely damaged.
Mian Zahid Hussain further said that the rupee has stabilized due to the decrease in global commodity prices, the tax situation and positive statements from the IMF. Still, for economic stability, current account deficits will have to be balanced, while exports will have to be increased. Currently, electricity and gas are facing difficulties due to rising petrol prices, rising transport costs and fears of a global recession.
Mian Zahid Hussain said that ending the political strife and getting rid of the government institutions that are losing hundreds of billions of rupees should be the first priority of the government; otherwise, the cycle of taking new loans to pay off the old loans can never stop, which will increase poverty.