A prominent business leader on Wednesday issued a stark warning that Pakistan”s fragile economic recovery could be derailed, and its struggling export sector pushed into a “total collapse” if the visiting International Monetary Fund (IMF) review mission imposes further energy price hikes and tax burdens.
The caution came from Mian Zahid Hussain, a veteran industrialist and President of the Pakistan Businessmen and Intellectuals Forum, while addressing the business community on Wednesday.
Hussain acknowledged that the domestic economy is showing positive signs of a turnaround, pointing to a solid 5% growth in Large-Scale Manufacturing (LSM) during the first half of the fiscal year. He cited a remarkable 67.2% surge in automobile production and an 11.6% rebound in cement as indicators of strengthening domestic demand.
He also commended the Pakistan Stock Exchange for its landmark transition to a T+1 settlement cycle, a significant modernisation that aligns the capital market with global standards, despite a recent market correction from a peak of 191,000 points to the 166,000 level.
However, Hussain described the current situation as a “two-track reality,” where domestic recovery masks a “severe competitiveness emergency” for the nation”s export backbone. He highlighted that textile exports, a critical component of the country’s foreign exchange earnings, suffered a 7.13% year-on-year decline in January alone.
“The government must convey to the IMF that overtaxing a dying industry will hinder recovery rather than prosperity,” he urged.
The business leader explained that exporters cannot absorb any more “hidden taxes,” such as the Rs 5 to Rs 7 per unit cross-subsidy embedded in industrial electricity bills. This subsidy, he argued, makes Pakistani energy costs approximately 40% higher than those in competing regional economies like Vietnam and Bangladesh.
The sector”s vulnerability is compounded by the recently concluded India-EU Free Trade Agreement, which Hussain warned effectively neutralises Pakistan’s GSP Plus advantage and puts a $9 billion European export market at severe risk.
“If the IMF insists on maintaining the 10.5% interest rate or enforcing rigid Super Tax collections without allowing instalment relief, our exporters will be entirely priced out of the global market,” he stated.
While welcoming the government”s recent trade reforms, particularly the Export Development Fund (EDF) Act 2026 which mandates private-sector inclusion on its board, Hussain stressed that these measures require fiscal support. “Giving the business community control over the EDF is a historic win. But to truly utilise these funds for market diversification, the government must negotiate fiscal breathing room with the IMF,” he added.
In his concluding remarks, Mian Zahid Hussain implored the Finance Minister and the economic team to present a firm case to the IMF, arguing that with macro-economic stabilisation achieved, the focus must now pivot ruthlessly towards lowering the cost of doing business to save the country’s export base.