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 Wednesday said the further contraction in the GDP will increase inflation and unemployment adding to the problems of masses.
The UN has projected that Pakistan’s GDP will be 2.1 percent for the ongoing fiscal which is down from the forecasts of IMF, ADB and World Bank, he said.
Talking to the business community, the veteran business leader said that the government should reduce the speed of fall by introducing long-awaited reforms, he said.
The former minister noted that economic free fall begin in Dec 2018 which has taken a toll on all the sectors while Large Scale Manufacturing (LSM) is the worst hit.
The textile sector is reeling after withdrawal of the zero-rating facility, production of the automobile sector is down by 38 percent while the chemical sector has witnessed a fall of five percent.
Other important industries including food, beverages, tobacco, petroleum, refineries, pharma, iron, steel and electronics are also not in very good shape.
The plunge in LSM has also damaged allied medium and small industries, retailers and whole sellers as well as the transport sector.
The consumption of diesel and petrol has reduced by seven percent which indicates a slowdown in economic activities. The LSM problems will drag GDP down by 1.5 percent as 0.9 million jobs have been affected while FBR is facing substantial shortfall as this sector has a share of 70 percent in FBR collections.
The loss in industrial production has also reduced imports used as inputs which has reduced deficit but the loss is far greater then the benefit.