Pakistan’s economic crisis has forced millions across the country to settle for less during Eid. Retail sales in the country witnessed a sharp slump as compared to past few years in the run up to Eid al-Fitr, according to country’s top retailers.
The country is facing one of the worst economic crises in the recent history. Neighbour to China and India, world’s second and fifth largest economies respectively, Pakistan has less than a month’s worth of foreign exchange reserves. Islamabad is awaiting a bailout package of $1.1 billion from the International Monetary Fund (IMF) that has been delayed since November last year due to Pakistan’s inconsistencies with its fiscal policy adjustments necessitated as condition for such bailouts in the first place.
Consumer price inflation in Pakistan jumped to a record 35.37 per cent in March from a year earlier. At least 16 people have been killed in stampedes for food aid during Ramadan.
“There has been a 20 per cent reduction in sales across all categories except women’s clothing,” Tariq Mehboob, chairman of the Chain Store Association Pakistan (CAP) and CEO of Royal Tag, a clothing brand for men, was quoted as saying by Reuters.
Pakistanis are going through a phase when their currency is depreciating, government subsidies are being rolled back, and higher tariffs are imposed by the government to secure a bailout package of $1.1 billion from the International Monetary Fund.
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“Pakistanis have lost more than 50 per cent of their wealth in the last two years in the form of depreciation, so you’re now selling to people with 50 per cent less available funds, while the cost has gone up 100 per cent,” Asad Shafi, owner of female clothing brand Cross Stitch, was quoted as saying by Reuters.
“The expectation of fashion retailers is so low that even meeting breakeven or bare minimum sales just to stay alive is acceptable,” he added.
Pakistan expects its economy to grow 2 per cent during the current fiscal year. But earlier this month, the World Bank slashed Pakistan’s growth projections from 2 per cent to 0.4 per cent.
(With inputs from agencies)
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