Business community fears economic contraction after IMF deal

Attaining growth within IMF limits biggest test for Govt: FPCCI

Govt may not be able to accomplish economic objectives: Zubair Ahmed Malik

Dated: Sept 11

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday said using IMF loan responsibly and ensuring growth within the parameters of lender’s harsh conditions is to be one of the biggest test of the government’s ability.

IMF policies are widely blamed for chocking growth making life difficult for masses and the private sector while the PML-N is known for its pro-investment and pro-business policies, said Zubair Ahmed Malik, President FPCCI.

This obvious contradiction will make it very difficult for the government to ensure growth keeping lender happy and without compromising the falling living standards of masses, he added.

Speaking to the business community, Zubair Ahmed Malik said that majority of the population is already living below the poverty line reeling under rising inflation while businesses are finding it difficult to sustain.

“We see ahead an era of further depreciation in exchange rate, monetary contraction, massive unemployment, dwindling exports, reduced forex reserves, missed revenue targets, double digit inflation and rising cost of production,” he added.

He said that gas levy estimated at Rs105 billion, 30 to 50 per cent increase in power tariff and 30 per cent escalation in domestic power price from next month could result in increased energy theft and decelerated power sector recoveries.

Business community doubts accomplishment of the Government’s stated objectives like pushing growth rate to six per cent in five years, fiscal deficit at 4 per cent, tax to GDP ratio at 15 per cent, investment to GDP ratio at 20 per cent, and generation of 10,000MW of electricity.

Similarly, the FPCCI chief said, increase in food production and expenditure on education by 4 per cent each, pushing literacy rate to 80 per cent, 2 per cent hike in health sector spending, and creation of three million jobs seems difficult tasks. 

He noted that deadly combination of growing fiscal deficit and unsustainable trade deficit should be tacked to ensure sustainability.

Zubair Ahmed Malik said that solid and bold policy action is lacking which can tackle terrorism and sectarianism and improve socio-economic and political situation of the country which will help reform the economic fundamentals ensuring a bright future for generations to come.