Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Wednesday expressed concern over falling forex reserves. The current account deficit CAD) for August is 42 percent less as compared to the CAD of July, but the reduction is insufficient, he said. He asked the authorities to take steps to boost reserves.
Mian Zahid Hussain said that remittances increased by 7.9 percent in August compared to July, but it remains inadequate. Talking to the business community, the veteran business leader said that exports and remittances could slide due to fears of a recession in western countries.
He said that foreign investment was 1191 million dollars in the first two months of the last fiscal which has come down to 144 million dollars which should be increased.
The fall in foreign investment is due to political instability in the country, which is repelling the investors.
The foreign exchange reserves are below the accepted limit and sufficient for one month’s imports, which is also hurting the local currency, he observed.
The CAD has been reduced but not as per the target of the IMF, for which government will have to increase exports and reduce imports.
Floods have damaged crops which will result in imports of wheat, cotton and other items, and it will also hurt textile and rice exports which will push up CAD.
Mian Zahid Hussain said that if the international community delayed funding, it would further reduce forex reserves, hurting everything, including the rupee.
The textile industry earned 19 billion dollars during the last year; therefore, it should be allowed to import cotton from India; otherwise, Pakistan will have to pay a high import bill resulting in a crisis of payments.
He said that Finance Minister Ishaq Dar is facing uphill tasks in the current multiple challenges.