In a concerning development for Pakistan’s economy, more than 1,600 textile factories in the country have ceased operations over the past sixteen months, as revealed by Interim Commerce Minister Dr. Gohar Ijaz.
Impact Across the Value Chain
This shutdown has cast a wide net, affecting every segment of the textile value chain, from ginning and weaving to spinning, processing, and even garment manufacturing. Moreover, numerous industries within this sector are currently operating at reduced production levels.
Dr. Ijaz emphasized the magnitude of this crisis, stating that approximately 20% of the total installed capacity within the textile and clothing sector has been adversely affected during this period.
Government’s Strategic Response
In response to this alarming situation, the government is actively finalizing a strategic framework. This framework aims to provide comprehensive solutions to the challenges faced by the Textile Factories.
Unlocking Production Potential
Dr. Ijaz expressed optimism that the forthcoming policy announcement would unlock the full production capacity potential within the country. This indicates a ray of hope for the struggling industry.
Shifting the focus to export statistics, the latest data from the Pakistan Bureau of Statistics (PBS) reveals that in August 2023, Pakistan’s exports amounted to $2.36 billion. This marked a 4.8% decline compared to the $2.48 billion recorded in August 2022. However, it also represented a 14.3% increase over the $2.07 billion exports recorded in the previous month.
Dr. Ijaz attributed this month-on-month growth to the positive impact of the policies implemented by the caretaker government. Worth noting is that the caretaker Prime Minister, Anwaar-ul-Haq Kakar, and his cabinet members assumed office on August 17.
Relief for Exporters
In further support of the export sector, Dr. Ijaz announced that the Federal Board of Revenue (FBR) would transfer Rs. 31 to exporters’ accounts on the upcoming Monday. Additionally, he mentioned that more refund payments to exporters are in the pipeline, offering a glimmer of hope for exporters grappling with working capital challenges.
These developments underscore the challenges faced by Pakistan’s textile industry and the government’s efforts to stabilize and revitalize this crucial sector of the economy.