KARACHI: The Pakistan Businesses Forum (PBF) CEO, Ahmad Jawad, has urged mainstream political parties to share their agendas with the people of Pakistan that how they would shape country’s economy after wining the elections.
He said despite the resumption of the IMF program, the country is still suffering from a serious depreciation crisis, as the rupee has cumulatively fallen which needs to be fixed by ending market speculation through State Bank of Pakistan.
Ahmad Jawad said finance minister have to announce a clear policy on the rupee as sorrows of the trade and industry in terms of high inflation, loss in employment, and lower profitability are not easing despite the restoration of the IMF program, because electricity concession for exporters has been withdrawn while petroleum levy on petrol and diesel has to be increased to Rs 50 per liter by Jan 2023, and perhaps, after that, the next step is to impose GST. He said these are not good indicators for the economy. Bond and currency markets, which had shown more confidence in Pakistan after the IMF deal, are again pricing in a high risk of the country defaulting on its foreign debt. Since the end of August, the yields on some of the government’s international bonds have jumped by a third, while the currency is one of the worst performing in Asia.
Jawad said that tax revenues, industrial production and other targets set by the government have been shredded. “All the figures have gone haywire,”
PBF believes that real effective exchange rate (REER) of the dollar against the rupee is less than PKR 200 for a dollar; and, for all practical reasons, the current depreciation cycle is the direct result of speculative trading, lack of regulatory oversight and mismanagement of the forex market. He questioned that we rejoice repayment of $ 1 billion Sukuk whereas do not take step to save dollar we are wasting. Using daylight will save $ 3.5 billion. He said a financial emergency is required.
PBF Vice President Jahanara Wattoo has asked the government to rescue the economy, which is dangerously slowing down. He said currency crisis is also worsening, as there is a limit for businesses to absorb growing costs and enhanced taxation pressure.
She also said Pakistan has serious long-term structural economic problems, and the costs for this year’s devastating floods will be in the tens of billions of dollars. Suffering from mammoth floods every 10–12 years, which are becoming worse and more frequent due to climate change, Pakistan is one of the world’s most water-stressed countries.
Copyright Business Recorder, 2022