Mian Zahid concerned at economic indicators for fiscal year

KARACHI: Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance and Chairman National Business Group Pakistan, Chairman Policy Advisory Board FPCCI, has expressed deep concern over the economic indicators for the first four-five months of the current fiscal year.

He emphasized that while the IMF previous tranche received in May 2025 has provided temporary solvency, and another tranche is also on the way, the real economy is struggling under the weight of exorbitant energy tariffs and structural inefficiencies.

Mian Zahid Hussain stated that the government must adopt tangible measures to address the root causes of economic stagnation. He noted that while the foreign remittances have increased by over a billion dollars, Foreign Direct Investment (FDI) remains far below the potential required for sustainable growth. "Despite government claims, net FDI inflows have struggled to cross the $1 billion mark in the last five months, reflecting a lack of investor confidence caused by the high cost of doing business," he observed.

He warned that foreign investors closely monitor the profitability of local industries; when domestic businesses are closing down due to energy costs exceeding 13 cents per unit, attracting foreign capital becomes impossible.

Discussing the export performance, the veteran business leader pointed out that while there has been a marginal increase in exports, the trade deficit remains a threat. "Our exports for the July-October period have hovered around $13 billion, which is insufficient to service our external debt obligations without borrowing," he said.

He highlighted that the Large Scale Manufacturing (LSM) sector is progressing @ 4.08%, and without a robust industrial base, export targets will remain elusive.

Mian Zahid shed light on the alarming rise in poverty and unemployment. Citing recent trends, he noted that inflation, though decelerating from previous highs, has still eroded the purchasing power of the common man, nearly 44% of the population below the poverty line, according to World Bank report.

"The structural reforms demanded by the IMF, specifically the aggressive taxation on the salaried class and corporate sector, are squeezing demand. When purchasing power dies, industry dies, and unemployment rises," he added.

He urged the authorities to revisit the agreements with Independent Power Producers (IPPs) and accelerate the privatization of loss-making State-Owned Enterprises (SOEs), which are bleeding billions of rupees annually.

"The government cannot tax its way to prosperity. The cost of doing business must be brought down by slashing energy tariffs and reducing the policy rate to single digits to revive industrial activity and boost exports," Mian Zahid Hussain concluded.

Copyright Business Recorder, 2025