KARACHI: Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals From, Mian Zahid Hussain said that the harsh decisions of the government and the central bank have made life very difficult for the people and the business community.
However, these decisions helped restore the confidence of international institutions, while the pressure on foreign exchange reserves, the rupee has eased and the current account deficit has come down, he said.
Mian Zahid Hussain said that a surplus of US nine million dollars in the current account in November is a good development. This achievement was made possible due to the tight monetary policy, which reduced demand.
Talking to the business community, the veteran business leader said that in addition to the central bank’s initiatives, imports were also controlled, which positively impacted foreign exchange reserves and proved that the country could survive in the absence or lack of many imports.
He further said that the current account deficit for the first five months of this year is US 1.16 billion, which was US 3.26 billion in the first five months of last year.
This deficit reduction is a great achievement, and if there is no indiscriminate increase in spending after the election, the annual deficit will not exceed four and a half billion dollars, which will be a great success for policymakers.
He said that a strict policy is also necessary because, despite the IMF programme, the expected capital is not coming to the country.
Apart from this, remittances are decreasing, while the situation of exports is also not satisfactory due to an increase in production costs.
After possible foreign investment under SIFC, the central bank may consider easing monetary policy while easing imports, but this is not an immediate possibility, he observed.
Mian Zahid Hussain further said that economic growth has stopped due to measures to reduce the current account deficit. The business environment has been affected, and new employment opportunities are not being created.
Administrative measures have improved the economy, but this is not a long-term solution. He said that to stabilise the economy, exports must be increased, and the reasons for the decrease in remittances must be known, and the confidence of the people living abroad must be restored.
Apart from this, there should be a crackdown on the hundi business so that the remittances come into the country legally. He further said that along with administrative measures, reforms, the sale of failed government institutions, reductions in oil, gas, and electricity prices, better incentives to investors, and the elimination of terrorism are also necessary.
He said that agricultural and industrial production needs to be increased by paying special attention. In contrast, political stability needs to be given attention, without which investment will remain a dream and policymakers will continue to try to save the economy instead of growing it.
Copyright Business Recorder, 2023
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