ISLAMABAD: Federal Minister for Finance and Revenue Muhammad Aurangzeb has warned that strikes, sit-ins, long marches and road blockades could inflict an estimated Rs120 billion daily loss on Pakistan’s economy, terming such disruption “self-inflicted pain” at a time when the country is shifting from economic stabilisation towards growth.

In a televised recorded message on Sunday, the finance minister said the assessment had been prepared in consultation with the economic wing of the Planning Commission, taking into account previous disruptions and the prevailing economic situation.

The statement came after Jamaat-e-Islami (JI), Kissan Ittehad and Pakistan Tehreek-e-Insaf (PTI), announced plans for long marches in Islamabad in the coming week.

He said the services sector could suffer around Rs86 billion daily, the industrial sector Rs25 billion and agriculture around Rs9 billion due to disruption in economic activity.

The services-sector estimate includes financial services, communications, transportation, retail, wholesale and hospitality, while the industrial-sector impact covers construction, finished goods, raw materials and supply-chain activity.

The agriculture sector could face losses through disruptions to transportation, perishable goods, dairy supply chains and agricultural trade. Aurangzeb further estimated that disruption to economic activity could result in around Rs17 billion in daily revenue losses, while the government would also face additional costs relating to logistics, transport, fuel and deployment of security personnel.

He warned that the potential losses were particularly significant as Pakistan had only recently emerged from a period of economic stress and was attempting to shift from stabilisation to sustainable growth.

“Economic stabilisation achieved through great effort, difficult decisions and continuous efforts should not be disrupted,” he said, urging stakeholders to resolve their issues through dialogue.

The finance minister said Pakistan’s economic indicators had started showing improvement, with foreign exchange reserves reaching USD21.4 billion, their highest level, while the fiscal deficit had declined to 2.6 per cent of GDP, a 22-year low.

He said the current account had moved into surplus after 14 years, while the previous fiscal year remained broadly balanced and the trend had continued during the first two months of the current fiscal year.

Remittances were also maintaining their upward trajectory, he added.

Aurangzeb said GDP growth stood at 3.7 per cent last year and was expected to exceed 4 per cent during the current fiscal year.

Large-scale manufacturing had also shown recovery, with both monthly and annual growth recorded in July and August.

He said corporate profitability was improving and participation of investors, particularly young people, in the Pakistan Stock Exchange was increasing.

According to him, 11 IPOs were launched last year, while another five were completed during the first two months of the current fiscal year. He termed the increase in IPO activity an indication of business expansion, equity raising and establishment of new production units.

The minister stressed that the next phase of economic growth must be driven by exports to avoid a return to the boom-and-bust cycle.

He said the government had set a goods export target of around USD32.9 billion for the current fiscal year, with exports expected to increase by about 6 per cent.

Pakistan’s daily goods export volume was around USD90 million, he said, warning that previous disruptions had resulted in exports being hit by almost 50 per cent in severe cases.

Aurangzeb said Pakistan’s exporters were already facing pressure from disruptions in the Middle East, particularly around the Strait of Hormuz and Bab el-Mandeb, with freight and insurance costs increasing.

“Additional domestic disruption through strikes and road blockages would further increase the pressure on businesses,” he said. The finance minister also highlighted the vulnerability of Pakistan’s growing IT export sector, saying IT exports stood at around USD811 million during July-August, equivalent to approximately USD13 million per day.

He warned that disruption to internet connectivity could have severe consequences, recalling that IT exports had previously been affected by as much as 80 per cent during the worst disruptions. He said the immediate burden of economic disruption ultimately fell on ordinary citizens, daily-wage workers, small traders and small businesses.

Aurangzeb said Pakistan had achieved economic stability after “hard work and difficult decisions” and that the country must now maintain the momentum towards sustainable growth, exports and investment.

He said foreign direct investment stood at USD311 million in August, but stressed that greater investment was required. According to him, macroeconomic stability was a prerequisite for attracting foreign investors, while improving confidence among domestic investors could also encourage foreign investment.

The finance minister urged all stakeholders to resolve outstanding issues through negotiations and consensus, saying the country’s economic recovery should not be put at risk.

“Facts, figures and possible economic losses need to be placed before the public,” he said, stressing that Pakistan’s transition from stabilisation to sustainable growth must continue.

He also referred to the security situation, saying Pakistan was dealing with a wave of terrorism in some areas and pointing to the recent incident in Kohat in which security personnel were killed.

“Our army and our civil armed forces are ready to confront them and are confronting them,” he said.

Against this backdrop, Aurangzeb urged political and other stakeholders to consider the wider economic consequences of long marches, sit-ins and strikes.

“This would be self-inflicted pain,” he said, arguing that disruptions would undermine the economic gains achieved through difficult decisions and sustained efforts. He said the government had also considered the additional costs that could arise from security deployments, logistics, transport and fuel if large-scale protests took place, saying these would place a further burden on the national exchequer.—TAHIR AMIN