Pakistan’s economy is slowly picking up pace, with fiscal consolidation under the International Monetary Fund (IMF) programme. However, the tightening measures being employed are placing an immense pressure on the industrial sector.

While the government remains committed to stabilising public finances, the concurrent rise in energy costs, increased taxation and liquidity challenges are severely impacting industrial competitiveness, employment levels and also hinging exports from reaching its full potential. These pressures, if left unaddressed, risk slowing down of industrial activity and undermining broader economic stability.

The textile sector, which accounts for nearly 60 percent of Pakistan’s export earnings and employs millions, is at the forefront of these challenges. Soaring energy prices have become one of the most significant obstacles to industrial sustainability.

Electricity tariffs in Pakistan have now escalated to 16.6 cents/kWh, which is eroding competitiveness of Pakistani industry. Regional competitors and advanced economies have much lower energy rates: India 12.1 cents/kWh, Bangladesh 8.7 cents/kWh and Vietnam 7.5 cents/kWh.

To further exacerbate the situation, the government has also increased the price of gas being provided to Captive Power Plants, from Rs 3000/MMBtu to Rs 3500/ MMBtu. A levy over and above this price is also being considered as a punishment........

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