Friday, July 1, 2022

Mian Zahid: Loans from IMF, friendly countries aided economy withstand shocks


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Former minister Mian Zahid Hussian said that the Loans from IMF, friendly countries helped economy withstand shocks. President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain said the Governor SBP has claimed economic stability which should result in softening of policies.

He said If the claim is right then policies to discourage demand should be relaxed and focus on stability has discouraged economic activity, crippled large-scale manufacturing, paralyzed vending industry and left the market without customers, he said.

Mian Zahid Hussain said that the interest rate hike and other steps have damaged the businesses while forex reserves have improved with loans from the Inertational Monetary Fund and friendly countries. Talking to the business community, the veteran business leader said unprecedented loans have enabled the economy to withstand internal and external shocks, however, low revenue collection, exchange rate volatility, budget deficit and Kashmir issues can drag the economy down.

The former minister noted that the current account deficit has been reduced from $18 billion to $13.6 billion, which will be further reduced which required intervention and reducing imports. He said that inflation has jumped from 3.8 percent to 9 percent, while the interest rate surge and devaluation of PKR has damaged masses and the private sector which is reducing the GDP.

The interest rate has jumped from six percent to 13.25 percent in one year, which has pushed banks to invest in government papers and avoid the private sector, while the government has borrowed Rs1.37 trillion in the first month of new fiscal which has raised concerns.

The private sector borrowing has come down from Rs618.2 billion to Rs 607.5 billion, which is now drying up and according to Chairman FBR, the revenue collection during the first two months has reduced by ten percent. He said that political instability is hitting exports and local as well as foreign investment which is not in the national interest.

Read also: Regressive taxes keeping many countries poor: Mian Zahid

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