LAHORE– The Pakistan Hosiery Manufacturers & Exporters Association has welcomed the central bank’s hefty cut of 2 percent in its key interest rate, bringing it down to 9 percent, besides appreciating the Ministry of Commerce proposal to exempt duties and taxes on exports proceeds to cope with the fallout from Covid-19 on exports.
The PHMA vice chairman Shafiq Butt and Pakistan Knitwear & Sweater Exporters Association Chairman Shehzad Azam Khan, in a joint statement, observed that the SBP’s decision of third cut since March 17, 2020 when the rate was 13.25 percent, will definitely stimulate economic activity, as the interest rate was declined by 4.25 percent during one month period alone..
The apparel industry leaders were of the view that this action would cushion the impact of the coronavirus shock on growth and employment, including by easing borrowing costs and the debt service burden of households and firms, while also maintaining financial stability.
PHMA chairman Shafiq Butt said that the move would also help ensure that economic activity is better placed to recover when the pandemic subsides.
He said that the country’s export of goods declined by 8.46 percent year-on-year to $1.807 billion in March while the government estimated exports is targeted at $26.187 billion during the ongoing fiscal year from $24.656 billion in FY19.
Shafiq Butt said that close to $1.3 billion worth of orders from foreign buyers for March and April have either been postponed or cancelled.
To resolve the liquidity issues of the industry, especially textile, the government will have to release maximum refunds of exporters, he added. “It is appreciated that under the prime minister’s Rs1,240 billion stimulus package announced on March 27, the government has released Rs100 billion to industry under tax refunds, as the improved cash flow position of the companies will ensure that workers get their salaries on time,” he hoped.
Shafiq Butt observed that that improved cash flow position of the hosiery exporters would ensure that workers get their salaries on time.
PHMA vice chairman noted that it is the time to take unprecedented steps to support business and employment in this difficult situation, releasing tax refunds to the industry at a fast speed.
On this occasion, Pakistan Knitwear & Weeters Exporters Association Chairman Shehzad Azam Khan also appreciated the home department of the Punjab government to support the exporters and manufacturers, avoiding an unnecessary delay and allowing export-oriented sectors to start production during the lockdown in order to clear pending shipments.
Apparel sector appreciates the full cooperation of the relevant commissioners, urging them to speed up the necessary official procedure so that industry cycle could run smoothly. The industry ensure the government to adopt all SOPs at the industrial premises, including arrangement of health, safety and environment, social distancing mechanism for workers during the lockdown and arrangements for screening of workers, testing and subsequent isolation and reporting arrangements of suspected workers, available export stock ready to ship and its transportation arrangements.
The PHMA members also assured authorities to adhere to the government and the World Health Organization guidelines regarding transportation and workplace safety.
With the easing of the lockdown, the PHMA hopes our exports will be able to move forward under the new SOPs of the government, he said.— PRESS RELEASE
