KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has strongly criticised the economic managers for being directionless, not holding consultative sessions with businesses and an unprecedented delay in reaching a deal with the IMF.
The FPCCI said that most of the major economies of the world have a more than 70 percent share in regional trade, whereas Pakistan’s trade with the regional countries never took off and was now in reverse gear.
FPCCI Acting President Suleman Chawla in a statement on Saturday said, “Exports and remittances – the two mainstays of generating foreign exchange for the country – are in a free-fall.”
Exports to nine regional trade partners have declined by 18.3 percent in the first eight months of FY23, whereas overall textile exports have declined by 11 percent. In February 2023, there has been a contraction of 30 percent MoM. The decline in the country’s exports has been steady over the last eight months.
Chawla said that FPCCI is observing with profound concerns that the decline in exports is incrementally snowballing into a complete nosedive, as on a YoY basis, October 2023 saw a 3.25 percent decline; November 17.6 percent; December 16.3 percent and January 2023 witnessed a decline in exports to the tune of 15.4 percent. This is a systemic decline, and needs to be arrested through a broad but effective consultative process, he added.
Acting FPCCI chief noted that remittances experienced a 32 month low in January 2023 with a mere $1.89 billion inflows, which should have sent shivers down the spine of the country’s economic managers. He added that Pakistan’s total foreign exchange reserves (FER) would have been close to $15 billion currently; if the government had managed only one aspect of the external inflows, ie worker’s remittances that shed 20 percent YoY, by now the IMF’s 9th review would have been successful.
Chawla maintained that Pakistan’s total FER was just above $10 billion after accounting for the reserves with the commercial banks, whereas the central bank only has $4.6 billion. SBP reserves are what really count, he added.
FPCCI demanded that the government should bring forth some transparency and clarity vis-à-vis its management of external account. It also demanded to know the reasons as to what exactly was hampering the IMF staff-level agreement (SLA). It further asked the government to outline the subsequent steps that needed to be taken for the stabilisation of the economy after and if the IMF deal was finally struck.