(July 26, 2019)
President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain on Friday said contrary to the expectations the IMF’s programme has failed to bring stability.
The economy is still unsteady while GDP has contracted from $330 billion to $270 billion which has made it difficult for the government to achieve tax, economic and social sector targets, he said.
Mian Zahid Hussain noted that LSM is shrinking auto industry and many other sectors have cut production due to low demand.
Talking to the business community, the veteran business leader said that the wheat target is set to be missed by 1.5 million tonnes, consumption of petroleum products is down by 25 percent and diesel consumption has been reduced by 20 percent
The former minister noted that apart from diesel the consumption of gas has been reduced to an extent that it has become a threat to the gas network as the country has no gas storage capacity and rescheduling LNG shipments would be a costly option. The current account deficit has been reduced by 31 percent but exports are sliding and imports continue to grow and a loss of $1 billion per month is expected during the ongoing fiscal.
The interest rate hike has crowded out the private sector and banks would continue to prefer investment in government securities to get 13.25 percent interest. The stock market has lost 2500 points, foreign investment has touched the mark of $1.7 billion from $3.4 billion and loans to the private sector has receded by 12 percent. The exchange rate unpredictability continues to haunt the economy and now the dollar is being traded at Rs 162.
Some elements in the business community are still resisting the tax reforms resulting in a deadlock while whole sellers are retailers are at daggers drawn against FBR due to trust deficit. He asked the trading community to not resist the move to expand the tax base.