BackEconomic crisis to hit Pak industries, workforce after textile exports fall
Pakistan witnessed at least 14.8% decline in textile exports amid the ongoing economic crisis.
PremiumAs Pakistan is struggling with its worst economic crisis in decades, the country's industry is bracing itself for cuts in production and workforce, especially in the textile sector after it witnessed at least 14.8% decline in textile exports, according to the data released by the Pakistan Bureau of Statistics.
Nasir Mansoor, Secretary General of the National Trade Union Federation Pakistan (NTUF) said that as many as one million informal workers, mostly from the textile sector, will lose their jobs.
In January 2023, Pakistan's export stood at USD 1.3 billion, which was less as compared to January 2021's USD 1.5 million. On a month-over-month (MoM) basis, the country reported a decline of 2.5%.
"The 2022 floods washed away at least 45% of our cotton crop, leaving textile mills without an essential raw material. The other solution is to import raw material, but delays in LCs [letters of credit] opening have brought all operations to a halt," Mansoor explained, reported The News International.
Earlier this year, during a joint press conference held by the textile associations in January 2023, representatives of the associations revealed that around 7 million workers in the textile sector and textile-related industries had been laid off since last summer. Officials from the industry also blamed the government regulations, including delays in LCs opening for the serious situation.
Meanwhile, the Pakistan Association of Automotive Parts and Accessories Manufacturers also shared that around 25,000-30,000 workers in the auto sector had lost their jobs due to an unabated drop in annual sales, as per ANI reports.
A management-level official from an investment company in Pakistan said that the current macroeconomic conditions have affected sectors in a different manner.
"Sectors that are more likely to get affected by the current economic conditions in Pakistan are those which depend heavily on import; import of raw materials or other products, like autos. Rising interest rates have allowed the banking sector to perform really well. But since this policy leads to demand compression, more mainstream companies are expected to default. And this assumption can be backed by the fact that almost all banks are taking more provisions for loan losses," the management-level official said.
"Floods have already affected the agriculture sector. Companies that are not planning layoffs are likely to, at least, impose an unofficial freeze on hiring," the official said.
Pakistan's unemployment rate is a little over 6%. And the problem has remained consistent for the country for years.
(With ANI inputs)
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
