Pakistan's industries bracing for cut in production, layoffs

Islamabad [Pakistan], February 27 (ANI): Amid the economic crisis, Pakistan's industry is bracing itself for cuts in production and layoffs, especially in the textile sector, The News International reported.
As per the news outlet, Pakistan witnessed at least a 14.8 percent decline in textile exports, according to data released by the Pakistan Bureau of Statistics (PBS).
Secretary General of the National Trade Union Federation Pakistan (NTUF) Nasir Mansoor said that as many as 1 million informal workers, mostly from the textile sectors, will lose their job.
Pakistan's export stood at USD 1.3 billion in January 2023, which was less as compared to January 2021's USD 1.5 billion. On a month-over-month (MoM) basis, the country reported a decline of 2.5 percent.
"The 2022 floods washed away at least 45 percent 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 explains why Pakistan is lagging behind, 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.
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 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 percent. And the problem has remained consistent for the country for years, according to The News International. (ANI)