(April 08, 2022)
Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance and Former Provincial Minister Mian Zahid Hussain on Friday said the historic decision of the Supreme Court has created a positive situation in the markets and a ray of hope for the common man.
The prospects of a new united opposition government led by Mian Shahbaz Sharif have raised strong hopes for an improvement in the economy and overall situation, he said.
Mian Zahid Hussain said that the stock market and the rupee have appreciated due to positive sentiments in the market.
Talking to the business community, the veteran business leader said that Imran Khan’s misguided economic policies and the political manoeuvres have plagued the economy and affected the GDP rapidly, which could fall far below four percent.
Important institutions should play their role in bringing down the political temperature to save the economy from further losses.
Mian Zahid Hussain further said that wrong economic policies, irresponsible spending, patronage of failed state institutions, rising industrial costs, inflation and the failure to introduce reforms in the tax system have accelerated the decline of the economy.
Pakistan has to repay $12 billion in loans this year but it lacks the resources to fulfill obligations.
According to official statistics, the growth rate was 5.6 percent last year. The recent 2.5 per cent hike in interest rates will further reduce GDP and exports.
The war between Russia and Ukraine is also playing a role in increasing inflation and the sharp rise in oil prices was increasing the oil import bill while the decline in crop production was creating a crisis that would cost billions of dollars.
The share of oil and gas in Pakistan’s import bill is 30% which is increasing the bill drastically. Inflation and the sharp rise in energy prices have led to the collapse of the purchasing power of the people, which has resulted in a steady decline in demand in the market and an impact on inflation.
Mian Zahid Hussain further said that if the IMF’s grievances were not addressed and the breach of promises was not eliminated and the loans were not restored by it, then the situation would be further aggravated as expensive loans would have to be taken from other sources.
The rupee continued to depreciate against the dollar. As the dollar becomes more expensive, so does the cost of production and exports. The cost of manufacturing goods is rising and the pre-existing inflation in the country is rising sharply.