KARACHI: Zubair Tufail, President of United Business Group (UBG) and Hanif Gohar Secretary General of UBG Sindh Zone have said that the continuous increase in inflation has crippled the industry.

Due to the end of subsidies and the lack of new investment in the country, many factories have come to a halt. They said that the rate of inflation increased by 35.37 percent in March this year compared to last year, highest in the last 50 years, recorded in the month of March.

The inflation rate surpassed the high inflation rate of 31.5 percent in February. The central bank’s monetary policy could not control inflationary expectations. Due to the devaluation of the rupee, it is facing serious difficulties and there are also reports that the foreign exchange reserves are now only enough to cover up to four weeks of import payments.

Zubair Tufail said that the federal government’s removal of Rs 80 billion subsidy on gas for five export sectors will further increase their difficulties.

The supply of LNG has been terminated and from May 1, OGRA-approved rates will be applicable to all export sectors, according to which the export sectors will have to pay an additional $4 per mmbtu on LNG. This will not prove to be beneficial for the industry because it will suffer further crisis due to the high cost of gas.

Hanif Gohar said that Pakistan’s economy was extensively damaged due to the disastrous floods in August last year and the government has issued 170 billion rupees worth of new loans.

After taxes, the value of the rupee continued to decline, the annual inflation rate in food prices in March was 47.1 percent and 50.2 percent for urban and rural areas, respectively, and it is feared that inflation may rise to 38 percent in the coming days.

Hanif Gohar, expressing concern over the closure of investment avenues in the country, said that Pakistan is under the worst economic crisis of its history. Many factories have come to a standstill, markets are deserted, the construction sector has also been badly affected and millions of people are at risk of becoming unemployed.

He said that due to reduction in economic activities, ban on imports, limited activities in the stock market, account holders are forced to keep their capital in banks.

Copyright Business Recorder, 2023