Short-Term Economic Scenario Remains Volatile

Karachi (PR): Mr. Irfan Iqbal Sheikh, President FPCCI, has apprised that despite the unfounded claims of the government painting attainment of economic stabilization & possible economic recovery, short-term economic scenario for the country remains extremely volatile, rickety and uncertain on the back of rudderless and consultation-less economic policymaking of the economic & finance team of the federal government.

Mr. Irfan Iqbal Sheikh outlined three top macroeconomic issues of the country in the short-term that need immediate and rigorous policy interventions: (i) dwindling exports; which have witnessed an incremental downturn in Q3 of FY23 and Q4 looks even dodgier(ii) decline in worker’s remittances in the first 9 months of the current fiscal year after posting substantive growth in 3 – 4 years prior to FY23 (iii) expected negative economic growth in the range of – 1.0 percent to – 2.5 percent; categorically pointing towards the potential double whammy of decline in exports & domestic consumption simultaneously; setting the industry up for a major disaster.

FPCCI Chief has demanded that the government should utilize a number of policy tools at its disposal to forestall the unbearable social, economic and political costs of a recessionary cycle in consultation with the business, trade & industry stakeholders; support of friendly countries and bipartisan economic policymaking. We need a 360-degree rethink of industrial, trade, taxation, monetary and fiscal policies, he added.

Mr. Irfan Iqbal Sheikh has unequivocally and vociferously explained that no amount of internal or external; bilateral, multilateral or IFIs-financing would be able to prevent Pakistan from a full-blown and default-like balance of payments crisis, if exports & remittances are not protected and incentivized to repeat last year’s levels – as growth in both of the above is already off the table for the remainder of FY23.

As far as exports are concerned, the government needs to devise a protective mechanism that ensures access to finance and completion of export orders in hand through effective export financing scheme (EFS), temporary economic refinance facility (TERF) and long-term financing facility (LTFF).

Vis-à-vis remittances, Mr. Irfan Iqbal Sheikh, has proposed that difference between banking and informal channels should be minimized and investments of the overseas Pakistanis should be protected at all costs; as a substantial part of remittances are meant for investments into real estate.

We need to understand that the countries which have successfully sustained spikes in their worker’s remittances, have strengthened their banking and legal systems in favor of their non-resident citizens; and, there are countries in the world where banks offer better rates on foreign exchange than that of their informal channels, he added. 

Brig Iftikhar Opel, SI (M), Retd.

Secretary General