KARACHI: Irfan Iqbal Sheikh, President Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has forewarned that the abrupt withdrawal of power sector subsidy to appease IMF is set to decrease exports even further; which have already in decline for the last 6 months consecutively, i.e., August 2022 – February 2023 as per the numbers released by Pakistan Bureau of Statistics (PBS).
Irfan Iqbal Sheikh added that, as per the latest statistics, Pakistani exports have declined by a hefty 18.67 percent in February 2023 on a YoY matrix from $2.83 billion in February 2022 to $2.31 billion in February 2023; whereas, the government is not willing to accept the ground realities and trying to make us believe that the decline is merely in the vicinity of 10 percent.
Irfan Iqbal Sheikh mentioned that the aforementioned power subsidy had to end by June 2023 with a tangible possibility of renewal or renegotiation. However, the government has withdrawn it in the most harmful manner to the export-oriented industries.
FPCCI Chief apprised that textiles & its allied products have the lion’s share in the country’s exports and they have achieved the number of $19.3 billion exports in FY22 through their sheer hard work, entrepreneurship, competitiveness and resilience in the face of COVID-induced challenges.
Suleman Chawla, SVP FPCCI, highlighted that the textile industry is suffering on multiple counts: (i) unavailability of sufficient quantities of domestically produced cotton due to floods & continuously reducing crop area (ii) import of cotton on a more than 50 percent devalued rupee in a short-span of less than 1 year; which accounts for 60 percent of the total cost of production of textiles (iii) unavailability of dollars to settle import LCs for raw materials & machinery (iv) demurrages, container and terminal charges (v) acute shortages of raw material of cotton; resulting in closure of many textile units (vi) additionally, the withdrawal of power subsidy without creating any protective mechanism.
Copyright Business Recorder, 2023
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