Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain said on Wednesday that the country is going through a difficult period of economic instability, a low growth rate, and unbearable inflation. Under these circumstances, full implementation of the IMF conditions is the only means of improving Pakistan’s credit rating, through which more loans, rollover of old loans and the initiation of foreign investment are possible, he said.
Mian Zahid Hussain said that an improved global ranking will enable access to cheap loans essential for survival.
Talking to the business community, the veteran business leader said that from January 2022 to June 2023, the value of the rupee decreased by 62% against the dollar, eroding the purchasing power of the people.
After the approval of the standby programme from the IMF and the acquisition of a loan of 1.3 billion dollars, the foreign exchange reserves in the State Bank have exceeded 8 billion dollars, the interest rate has been increased to 22 per cent, and import restrictions have been removed.
But clearance of imported merchandise is slow, while dollar deregulation has been lifted, and the Pakistan Stock Market has crossed 48 thousand points, which shows the business community’s confidence.
Mian Zahid Hussain said that inflation has decreased from 39% to 29%, while the country’s global ranking has improved slightly. The fiscal deficit has been 7.6 per cent from July 2022 to June 2023, due to which new taxes have been imposed in the budget.
He informed that by June 2024, Pakistan has to pay off $25 billion in foreign debt, which will need to be rolled over and impossible if the IMF is annoyed by Pakistan violating the agreement.
After the election, he said Pakistan will need a long-term IMF programme, during which real economic reforms can reduce electricity prices in Pakistan, thereby reducing the cost of doing business and increasing Pakistan’s exports.
As the economy improves, global rankings will improve, making it easier to get loans and restoring investor confidence, he said, adding that Pakistan is one of the ten most vulnerable countries to climate change.
Last year, the country lost 31 billion dollars due to floods, so strong measures are needed to prevent such events in the future, for which there are no resources.
He said that we should not wait for the international community to help flood victims and rebuild infrastructure because this is our problem, and we must solve it.