KARACHI: Pakistan's economy has entered an "acceleration phase," marked by a 10.37% increase in Large-Scale Manufacturing (LSM) and unprecedented highs in the Pakistan Stock Exchange, nearing the 189,000-point level. Mian Zahid Hussain, President of Pakistan Businessmen and Intellectuals Forum, highlighted these developments in a statement, emphasizing the shift from economic stabilization to growth.
According to Pakistan Businessmen and Intellectuals Forum, the government's recent "Industrial Relief Package," including a reduction in the Export Refinance Scheme rate to 4.5% and a Rs 4.04 per unit cut in industrial power tariffs, is expected to further stimulate the manufacturing sector. The automotive industry, in particular, has seen substantial growth of 79%, with petroleum products and garment production also experiencing notable increases. The HBL Manufacturing PMI reaching a 10-month high of 52.8 indicates a resurgence in factory operations and employment.
Mian Zahid Hussain also praised the forthcoming transition to the T+1 Settlement System on February 9, which he described as a significant modernization effort. This change is anticipated to double market liquidity, align Pakistan with major global exchanges, and bolster investor confidence, reflected in the KSE-100 index's gain of over 10,000 points in January.
Despite these positive developments, Hussain expressed serious concerns about the textile export sector. He warned that the recent India-EU Free Trade Agreement poses a significant threat, undermining Pakistan's GSP Plus advantage by allowing Indian textiles duty-free access to the European market. Additionally, a potential trade deal between the US and India could exacerbate the situation.
Hussain pointed out that Pakistan's textile industry struggles with a cotton shortfall, producing only 5.54 million bales against a target of 10.2 million, leading to production costs 34% higher than competitors like Vietnam and India. He criticized the "hidden tax" of cross-subsidies in energy bills, which he argued hampers global competitiveness.
He called on the government to declare the textile industry's decline a "National Emergency" and advocated for the immediate implementation of the Mobile and Electronic Devices Policy 2026-33 to diversify exports. He stressed the need to eliminate cross-subsidies through a "Level Playing Field Tariff" to allow Pakistani exporters to compete with regional counterparts' lower energy rates.