Economy faces downside risks: FPCCI

Dawn reported that Atif Ikram Sheikh, president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has raised alarm over the trade deficit, which widened 18.1 per cent to $7.1 billion in 2MFY27 from $6.025bn. He argued that imports are rising far faster than exports, a gap he said urgently endangers economic stability and the country's currency reserves.

In a statement, he attributed weak exports not to any shortage of industrial capacity but to the rising cost of doing business, saying export-focused factories are being squeezed out and have lost competitiveness against regional rivals abroad. He called the State Bank's high policy rate an obstacle to trade and industry, arguing it has left manufacturers struggling to service loans, secure working capital or fund modernisation. Higher electricity tariffs, linked to capacity payments and cross-subsidy costs, along with disrupted gas supply and elevated fuel prices, are also raising logistics expenses.

Sheikh urged the prime minister, the finance and commerce ministries and the SBP to meet business leaders at once and devise a crisis-response plan. He also called for a sharp cut in the policy rate, electricity and gas tariffs aligned with regional competitors, and targeted petroleum levy relief for goods transport, warning that otherwise factory closures could spread and FY27 export targets could be missed.