ISLAMABAD     -         Industrialists have expressed concerns over the government’s attitude for not addressing their genuine issues that resulted in reduction in exports andl growth in big industries.

Industrialists are currently facing issues like high rate of interest and energy prices and gas loadshedding in different cities of the country. They also blamed higher cost of doing business and exchange rate uncertainty for reduction in exports and production. They informed that industries are unable to meet export targets, as the production of major industries are declining continuously.

“We have recently met with Prime Minister Imran Khan and sought relief in major issues,” said an office bearer of Federation of Pakistan Chambers of Commerce and Industry (FPCCI). He further said that Prime Minister has assured to address the issues.

He informed that exporters could not meet the exports targets due to the aforesaid issues. The latest data of Pakistan Bureau of Statistics showed that country’s exports had declined by around four percent in last month.

Exports were recorded at $1.99 billion in December, down 3.96 percent over $2.07 billion in corresponding month last year. Exports could not increase despite currency was depreciated massively and government had given several other incentives to the exporters.

“There has been no industrial expansion in years, and without surplus production, one cannot expect increase in exports. The reduction is exports had already witnessed in last month,” said a Faisalabad-based exporter. He informed that import duties in Pakistan are much higher than competitors in the region, which need to be rationalised. He has also urged the government to ensure early release of stuck refund claims.

The State Bank of Pakistan has termed the overall downtrend due to macroeconomic stabilization policies of the government. Contractionary monetary and fiscal policies and realignment of the exchange rate, which resulted in the sharp Pak rupee depreciation in June FY19, helped set the tone for the industry at the beginning of FY20. These developments affected the cost structure of the industrial sector in general, and particularly for industries relying more on imported inputs.

Furthermore, in order to anchor inflation expectations, the SBP jacked up the policy rate by 100 bps in Q1-FY20 to 13.25 percent; the highest level since October 2011. On the demand side, low growth outcome is resulting in nominal wages not rising in line with higher level of inflation as compared to the previous few years, hurting the purchasing power of consumers. The increase in operational and financial costs amid low demand hampered the performance of the industrial sector during the period under review.