FAISALABAD: The Pakistan Textile Exporters Association (PTEA) has sought government’s intervention as textile industry has lost its compatibility against the regional competitors; and textile exports are witnessing drastic downfall on account of disadvantage in respect of production costs.
Expressing deep concern over the current economic uncertainty, PTEA’s spokesperson, in a statement here on Friday, has said that the economic slowdown pulled country’s exports down and experienced a troubling trend of negative growth right from the beginning of the outgoing fiscal year, except for a slight increase in August 2022.
Terming high production cost as the major factor behind this decline, he said that due to inefficient and unfriendly socio-economic environment, the cost of doing business in Pakistan has escalated enormously due to intermittent raise in the prices of raw materials and production inputs rendering our exports uncompetitive in international market.
Terming Large-Scale Manufacturing sector as a major economic driver, accounting for almost a quarter of the total GDP, he said that in May 2023, LSM experienced a concerning 14.37% year-on-year decrease. The 11-month period of FY 2023 also shows an overall decline of 9.87% year-on-year.
The sector’s drop is a concerning indicator for the economy, which is already confronted with a number of issues, including high inflation, a growing current account deficit, and a falling rupee. Government must take cognizance of serious matter and step up to save industrial sector from disaster as high production cost is holding it back from growing up to full potential.
Taking advantage, rival countries are creeping into our traditional markets, he lamented. With Government support, they have accelerated export growth and have increased their market share in global trade.
He was of the view that high priced energy which accounts for approximately 30-40% of production expenses has immensely damaged the export growth and adversely impacted the textile industry. Withdrawal of Regionally Competitive Energy Tariffs shall turn out to be further disastrous for textile industry which is already facing a serious blow of non-viability.
The government should encourage exports and export-oriented sectors to have long-term sustainability in the balance of payments. Textile exports have witnessed a massive increase of over 55 percent from $ 12.5 billion in FY 2020 to $ 19.5 billion in FY 2022 as a direct consequence of the competitive energy tariff.
Copyright Business Recorder, 2023
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