Pakistan Textile Exporters Association has expressed concern for Textile over the recent downfall in exports, attributing it to high production costs, currency devaluation, inconsistent policies, political instability, and economic meltdown.
The PTEA leadership has said that the political instability and economic slowdown pulled the country’s exports down 15.4 percent to 2.2 billion in January 2023 against $2.61 billion in the same month last year, making it the fourth consecutive decline. The key crisis in the domestic economy is the fall of the country’s foreign exchange reserves to an alarming level; whereas the rest of the crisis included a 49-year high inflation rate, a 23-year high key policy rate at 17 percent, a steep fall in exports, increased rate of taxes and historic devaluation of the domestic currency. The textile industry is operating at a capacity utilization of less than 50 percent across the country and a substantial number of jobs have already been lost and many more are to follow.
Due to decreasing exports and failure to end the economic crisis, huge numbers of laborers in textile and textile-related industries have lost their jobs. A much higher quantum of funds is stuck as a consequence of a 17 percent sales tax and devaluation on all inputs. Countries that compete with Pakistan in global textile exports including Bangladesh, India, China, and Vietnam are quoting reduced prices of up to 15 percent to foreign buyers as compared to those given by Pakistan. The worsening international economic situation primarily caused by the Ukraine crisis combined with floods in Pakistan has negatively impacted the already inefficient supply chains of the country.
Pakistan is passing through difficult times and an increase in export proceeds can lift the economy. PTEA stressed on taking stock of serious situations and sitting down with the stakeholders to identify the real challenges in export growth and resolve them on priority to accelerate the growth rate.
