ISLAMABAD: Pakistan’s textile producers expect a $500 million cut in monthly exports from July, a top industry official said on Saturday, as energy shortages have reduced production capacity by 30 percent.
The textile sector is as backbone of Pakistan’s economy with a 60 percent share in the country’s total exports. Its contribution to gross domestic product is 8.5 percent and it provides employment to around 15 million people.
Pakistan’s textile exports have recorded an increase of 28 percent to $17.6 billion in the first 11 months of this fiscal year, according to Pakistan Bureau of Statistics data released on Friday, but energy and fuel shortages are hampering efforts to further boost them.
“Our textile production has already started shrinking and this would lead to around $500 million reduction in the country’s exports from July,” Shahid Sattar, secretary-general All Pakistan Textile Mills Association, told Arab News.
“The recent energy shortage, including electricity and gas supply, has already shut around 30 percent capacity of the textile sector in Pakistan.”
The government has recently withdrawn subsidy on petroleum products and electricity for all consumers to meet International Monetary Fund (IMF) conditions to get a $6 billion loan program revived.
While authorities have yet to announce new electricity and gas tariffs for the textile industry, Sattar said producers were already unable to bid for new orders due to economic uncertainty in the country.
“This all will hurt our exports badly,” he added.
Muhammad Jawed Bilwani, chairman of Pakistan Apparel Forum, said political and economic instability in Pakistan was harming the country’s exports to the US and Europe — its main importers.
“From government to opposition everybody here is talking about Pakistan going bankrupt, then who is going to deal with us and place their orders with our industry,” he said, as he called for uninterrupted electricity and gas supplies on competitive rates to ensure maximum output and maintain flow of the exports.
“Layoffs in the industry have already started,” he added. “This is not an encouraging sign at all for our economy and exports.”