Advances to private sector plunge 73pc.

KARACHI -- Bank advances to the private sector plunged by 73 per cent during the first 8 months of the current fiscal year suggesting a painful economic slowdown leading to massive retrenchments in key industrial sectors.

The current financial year started with many troubles and all sectors after one another are facing a severe production slump amid falling demand triggered by unprecedented inflationary pressures pushing up the cost of production to unstainable levels.

The record inflation has already created survival risks for all businesses while the high cost of production makes it impossible for the exporters to compete with their rivals on the international markets.

All important sectors from textile to steel to automobile, etc have sent 'SOS messages' to the PMLN-led coalition government to review its short-term and damaging policies to put the economy back on the right path by taking all the stakeholders on board in the policymaking.

The steep decline in the credit offtake to the private sector indicates that industrial and business activities are slowing down causing massive layoffs across all sectors. The World Bank and IMF do not expect Pakistan to achieve an economic growth rate of even 2pc in FY23.

The central bank data showed that the private sector credit offtake was just Rs248bn in the first nine months (July 1, 2022 to March 10) against Rs911bn in the same period of FY22. Pakistan achieved an economic growth rate of about 6pc in 2021-22.

The traders and industrialists have been urging the PDM government that economic stability is only possible with consistency in policies.

Pakistan has been facing a serious external account crisis since the outset of the current fiscal year mainly due to fast dwindling foreign exchange reserves which dipped below $3bn creating a default-like situation.

With the rollover of a Chinese loan, the forex holdings of the State Bank of Pakistan recovered to $4.8bn this week, hardly covering one month's essential imports of Pakistan.

Inflation, measured by...