The business community in Pakistan is concerned about the potential increase in unemployment in export-oriented sectors as the country anticipates negative economic growth by the end of FY23.
This is due to the World Bank, International Monetary Fund and the Asian Development Bank cutting Pakistan’s growth to 0.4-0.6% for FY23 based on economic performance during the first eight months of the current fiscal year.
?The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Irfan Iqbal Sheikh has urged the State Bank of Pakistan (SBP) to soften the terms of the Export Finance Scheme (EFS) and Long-Term Financing Facility (LTFF) and extend loans at 10% to help exporters fulfil their pending orders.
Mr Sheikh has proposed a National Economic Agenda for the next 15 years to bring all political parties on board for continuity in economic policies. He also proposed a broadened tax base and simplified taxation system in the upcoming Budget 2023-24.
The Lasbela Chamber of Commerce and Industry (LCCI) President Ismail Suttur has raised concerns over the circular issued by the central bank that would discourage exporters from holding foreign exchange reserves in offshore accounts to gain the advantage of the rupee devaluation.
?The SBP Circular No. 02 of 2023 requires exporters to bring their delayed export proceeds to Pakistan by April 30, failing which the banks would mark a lien on export proceeds realised by the exporter. Mr Ismail believes that this change would lead to a significant financial burden on the exporters and that the circular lacks clarity on how an exporter can justify to the banks that the delay in export proceeds is due to the buyer’s inability to pay and not a deliberate attempt by the exporter.
He also highlighted that the global economy is currently going through a recession, which is causing delays in payments from importers and imposing additional regulations on exporters would not only be unfair but also highly impractical.