KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Thursday said mini-budget along with upsurges in petroleum and gas prices would further worsen inflation in the country, besides exerting unbearable pressure on both the common man and businesses.
“Businesses will go into severe crises due to one percent increase in GST, swelling petroleum prices, and a massive hike in gas tariff,” KCCI chief Mohammed Tariq Yousuf said.
He expressed deep concerns over Rs170 billion taxation measures announced in the form of a mini-budget in a bid to implement International Monetary Fund (IMF)’s prior actions to resume IMF-EFF programme for subsequent release of $1.2 billion tranche.
“The decision to raise GST from 17 percent to 18 percent would make all the goods expensive for poor masses who are battling every day to earn some bread and butter. Industries and businesses, which are already underperforming due to various issues, will not be able to sustain the impact of anti-business measures announced in the mini budget,” Yousuf added.
He feared that an economic slowdown in the country would further deepen on account of massive hikes in petroleum and electricity prices, especially for export-oriented sector the withdrawal of subsidies would raise electricity prices by around 80 to 85 percent, which for the export industry would be “lethal”.
“This definitely needs to be revisited by visualising the injury it can cause to the export-oriented sector.”
He was of view that the situation would lead to a massive hike in the inflationary pressure, which is likely to be countered through an increase in the interest rates to 19-20 percent by the State Bank.