The government can help struggling businesses by reducing taxes, providing them with low-cost loans, competitive energy tariffs and gradually shifting them towards export-oriented ones, said Raja Waseem Hasan, spokesman for Pakistan Industrial and Traders Associations Front (PIAF). Talking to WealthPK, he said Pakistan’s economy had been on the recovery track under the ongoing short-term IMF programme. “Though macroeconomic indicators have shown signs of stability, the government needs to ensure policy continuity and stay in the IMF programme by taking the much-needed structural reforms.” He said the business environment in Pakistan remained challenging as the cost of doing business had gone up considerably, while major industries faced supply chain disruption and declining demand. “The policy rate stands at a staggering 22%, while inflation continues to keep costs high, which will be a challenge for the government,” he said, calling for gradually reducing the key policy rate. “The business environment also faces import restrictions, which might continue to be there to control the current account deficit and maintain foreign exchange stability,” he said.

Hasan added that businesses also faced regulatory challenges such as long cumbersome processes to take approvals for operations, launching a new product and entering a new market. “Regulatory bodies should make sure that one window operation was available for the investors.” He suggested improving the business environment by ensuring policy consistency to control unemployment. He said Pakistan’s economic agenda should be long-term, and the industry should have certain goals within a given timeframe to be achieved. “Businesses should be given export-oriented goals and should be incentivised to tap into new markets. Moreover, the privatisation of loss-making state-owned enterprises should be expedited to bolster competition and turn around these organisations. “Lastly, as technology is a source of revenue globally, young graduates should be given IT training focused on providing services to international clients, which can reduce unemployment and earn foreign exchange for the country,” the PIAF official said.

Meanwhile, Majid Shabbir, Adviser at Islamabad Chamber of Commerce and Industry, said soaring electricity and gas prices had substantially raised production costs and crucial inputs for all sectors. “This escalation poses challenges for both industrialists and exporters, impacting profitability and market competitiveness.” “This emphasises the critical need for policymakers to tackle energy price hikes promptly and announce relief measures for industries. Failure to tackle this challenge risks undermining the viability of businesses and hampering the country's export potential in the global arena,” he said. Furthermore, the ICCI adviser said political turmoil had had a significant impact on the real estate and construction sectors, leading to a growth stagnation. “Moreover, individuals, who previously had substantial investments in these sectors, have experienced a significant decline in the value of their investments.”

“The business community is seeking tax relief in the upcoming budget. However, the government may not be able to grant any tax relief given the IMF programme conditionalities and grave fiscal challenges,” he said. Shabbir asked the government to take confidence-building measures to foster a robust business environment in the country. “These measures may include reducing bureaucratic hurdles, ensuring policy consistency, providing incentives for investment, enhancing transparency in regulatory processes, and fostering a conducive business environment.”

Credit: Independent News Pakistan (INP)