Friday , September 25 2020
Breaking News
Home / Breaking News / Businessmen fears worse economic conditions in 2020
Businessmen fears worse economic conditions in 2020

Businessmen fears worse economic conditions in 2020

KARACHI: The Business & Industrial Community of Karachi, which was already largely pessimistic about the business and economic conditions for 2020 before the outbreak of Coronavirus, fears that the economy is taking a beating at the hands of the COVID Pandemic, hence they expect the situation to deteriorate further from bad to worse.

According to Karachi Business Sentiment Survey conducted by Karachi Chamber’s Research & Development Department which collected responses from the business & industrial community of Karachi between 1st January 2020 and 15th March 2020, “The business and industrial community of Karachi has painted an eye-opening picture of the pace of business activities in 2019 and has signified low expectations for 2020.”

The initiative was launched on the directives of Chairman Businessmen Group (BMG) & Former President KCCI Siraj Kassam Teli and General Secretary BMG A.Q Khalil, besides being supported and facilitated by President KCCI Agha Shahab Khan, Senior Vice President KCCI Arshad Islam and Vice President KCCI Shahid Ismail.

However, it is categorically stated that the survey report has been compiled purely on aggregate inputs received from businesses and industrialists who participated in the survey and their opinion may differ from KCCI’s viewpoint.

The bilingual questionnaire was filled by a total of 1,103 unique manufacturers, service providers and traders representing more than 34 sectors including automobiles, textiles and real estate based on different scales of establishment from small traders to large multinational organizations.

The report, which also features sections in Urdu, revealed that with the exception of a few institutions, a large majority of Karachi based businesses experienced at least some degree of friction in the pace of business activities in 2019, regardless of the sector to which they belonged to.

The report states that only a few companies employed additional workers in 2019 while the remaining were either unable to provide additional employment opportunities or had to lay-off employees. In fact, 50 percent companies claimed to have reduced in terms of the number of employees in 2019 while as a consequence of the outbreak and disaster caused by coronavirus pandemic, a sharp growth in unemployment is being anticipated.

After analyzing a number of factors, the report concluded that Rupee depreciation, unprecedented rise in utility costs and Pakistan’s outdated and complex tax system are the biggest challenges for businesses. In addition to this, high import duties, hike in utility costs, rising fuel costs, inflation, high interest rates, smuggling and Karachi’s weak infrastructure also had an adverse impact on the daily operations of businesses in Karachi.

Furthermore, the report found that FBR’s CNIC condition is considered a road block for business operations and that the condition should be deferred.

However, popularly debated topics such as FATF and anti-encroachment drive did not necessarily have an impact on most businesses whereas CPEC has failed to generate enthusiasm among Karachi based businesses as most believe that they have not experienced any positive effects of the multi-billion Dollar project.

Using the feedback section of the report, businesses voiced their opinion regarding a wide range of topics from general complaints to policy suggestions as well as issues specific to some businesses. The report conveys comments related to FBR’s CNIC Condition, tax refunds, call for fair and unitary taxation system, poor planning and maintenance of infrastructure, incentivizing local manufacturing and more. The report states that the people of Karachi have asked the government to refrain from sudden changes in policies, indulge in deliberations with policy stakeholders and consider setting up a one window solution for businessmen.

The survey report states that the Karachi Business Sentiment Survey proved to be a useful tool and KCCI would continue its survey series for the betterment of Karachi’s business and industrial community.