Needn’t Celebrate Current Account Surplus Manifests Economic Contraction

Karachi (PR): Mr. Irfan Iqbal Sheikh, President FPCCI, has explained that current account surplus in Pakistan’s case for March 2023 is no reason to celebrate; in fact, it manifests a massive economic contraction like never before. Declining imports mean fewer industrial exports in the months to come and even lesser capacity to make timely repayments on external loans, he added.

Mr. Irfan Iqbal Sheikh, based on latest trade statistics for nine months of the outgoing fiscal, i.e. July 2022 – March 2023, apprised that textile exports have shrunk by 12.4 percent to $12.48 billion and IT & ITeS industry’s export remittances shrunk by 0.5 percent to $1.94 billion as opposed to 47 percent average growth IT & ITeS posted for 2 consecutive years, i.e. FY21 and FY22.

Whereas, as far as the total exports inQ1 – Q3 FY23 are concerned, Mr. Sheikh apprised that they stand at $21.046 billion as againts $23.35billion in the same period of the last year. We have exported $2.304 billion lesser this year; which reflects 10 percent decline and it is difficult to understand what government’s economic team is celebrating after achieving current account surplus through contractionary, regressive and recessionary measures, he added.

The incremental downslide registered in the export proceeds for the third quarter of FY23 is specifically alarming as it is indicating an even abysmal export performance in the fourth quarter, i.e. April 2023 – June 2023 as the mainstay of Pakistani exports, textiles declined by a whopping 22.6 percent in March 2023; and, we are perhaps heading towards an unchartered territory of unprecedented economic contraction – even in comparison to Pakistan’s rather battered economic history, FPCCI Chief added.

Mr. Irfan Iqbal Sheikh reiterated his stance that the only way forward to avert the total crumbling down of country’s social, economic and political fabric is to protect trade & industry to keep revenues, exports and employment afloat – and, we have, time and again, from the apex platform of FPCCI, offered our unconditional support to the government of Pakistan. We feel our responsibility in the broader national interest; but, the dialogue on the national economic agenda & plan for the next 15 years has to be conducted through an effective, inclusive and egalitarian consultative process with the business community, he added.

To kick-start the consultative process, Mr. Irfan Iqbal Sheikh has proposed a four-legged approach: (i) swiftly formulate a mechanism to protect exports (ii) chart-out a post-IMF Deal plan for stabilizing the economy with stipulated measures (iii) discuss broadening oftax-base supplemented with simplification of the taxation system (iv) discuss sector-wise budgetary proposals for FY24.

Brig Iftikhar Opel, SI (M), Retd.

Secretary General