Economic growth rate will become negative by the end of FY23 in Pakistan
Notwithstanding the hardest contractionary policies being taken in Pakistan over the past many months on the demands of the IMF, President FPCCI Irfan Iqbal Sheikh has pointed out the glaring irregularities in fiscal discipline, management of external account, and economic growth rate.
Irfan Iqbal Sheikh emphasized that the business, industry, and trade community in Pakistan, as well as other people who deal with the economic realities of Pakistan, can see that the nation’s economic growth rate will become negative by the end of FY23. International Financial Institutions (IFIs) have significantly reduced Pakistan’s growth rate predictions downward based on data and economic performance during the past 8 to 9 months, from July 2022 to March 2023. He continued, “It has been revised by the World Bank to 0.4 percent, the IMF to 0.5 percent, and the Asian Development Bank to 0.6 percent.
Yet, according to the FPCCI Chief, projections from independent economists range from -1.0 percent to -2.5 percent, with the year-end growth rate projected to be negative and millions more people into the unemployed pool. He continued that this would be the worst economic catastrophe in the nation’s history and that it would be difficult to break the recessionary cycle.
Irfan Iqbal Sheikh reaffirmed his position that the export-dependent industry and the nation’s exports must be maintained at all costs in order to prevent the collapse of the entire economy. He urged that the State Bank’s Long-Term Financing Facility (LTFF) and Export Finance Scheme (EFS) be made available on advantageous conditions, with a maximum interest rate of 10%, to allow exporters to feasibly fulfill their pending export orders.
Irfan Iqbal Sheikh argued that the entire political, social, and economic fabric of a country like Pakistan is torn apart when the growth rate goes into negative territory and that when it does so in a nosedive pattern within a short period of one year, the country’s virtually nonexistent foreign exchange reserves, exploding population, and battered industrial base are to blame.
Additionally, in the upcoming federal budget 2023 – 24, Irfan Iqbal Sheikh has proposed a broader tax base and simplified taxation system, and FPCCI, the apex trade & industry body of Pakistan, is ready to resume the practically dysfunctional consultative process with the government at nearly all levels.