KARACHI – Pakistan stands at a decisive economic crossroads, FPCCI warned on Thursday, urged urgent reforms to reverse what they described as a mounting crisis driven by soaring energy prices, high interest rates, slow GDP growth and a widening trade deficit.
Speaking at a emergent press conference at the Federation House, FPCCI President Atif Ikram Sheikh, United Business Group (UBG) Patron-in-Chief S.M. Tanveer, and Senior Vice President Saqib Fayyaz Magon outlined what they believe are the structural barriers choking industrial activity and investor confidence. Atif Ikram Sheikh said Pakistan’s economy “is standing on a sharp turn,” adding that the country can no longer afford delays in corrective measures.
He pointed to persistently high energy tariffs, historically elevated interest rates and a rapidly growing population as the most pressing challenges. “GDP growth remains far below potential. It signals fewer employment opportunities, declining living standards and an economy unable to accommodate its expanding population,” he remarked. The economic indicators, he warned, reflect deepening vulnerabilities. Pakistan’s trade deficit for the first five months of FY26 has surged by 37 percent, reaching $15.5 billion. Exports are stagnant, recorded at only $28 billion, while key sectors—rice, cotton and textiles—have seen year-on-year declines.
“Our electricity tariffs remain the highest in the region, which directly weakens industrial competitiveness,” he added. Sheikh welcomed the government’s recently announced incremental consumption package for industrial users but expressed reservations about the pricing mechanism. “The rate structure is not feasible for sustained industrial operation,” he noted.
Taking the podium, UBG patron S.M. Tanveer issued a stark message: “We have won the Ma’arka-e-Haq; now we must win the battle of the economy.” Tanveer stressed that Pakistan possesses the resources and potential to become “an Asian Tiger,” but only if energy, taxation and monetary policies are aligned with industrial growth rather than suppression. He highlighted the burden of capacity charges within the power sector, calling it one of the most destructive cost components for both industry and ordinary citizens. Electricity prices, he said, had fallen to 11 cents after negotiations with independent power producers (IPPs), but had now climbed back to 13 cents, with projections of 15 cents due to rising capacity payments.
“Capacity charges alone cost consumers 17.6 rupees per unit. Instead of reducing inefficiencies, the government continues passing this burden onto the public,” he said. Tanveer criticized the government’s incremental electricity package, stating that despite a public claim of supplying 22-rupee-per-unit electricity, industries are receiving bills as high as 36 rupees per unit. “This policy is shutting down rather than supporting industries. Already, 140 textile and paper mills have closed,” he warned. Senior Vice President FPCCI Saqib Fayyaz Magon added that visiting international delegations consistently express concern over Pakistan’s “uncompetitive” environment shaped by high interest rates, steep taxes and prohibitively expensive power tariffs. “Pakistan has immense potential. Our industries can run this economy—if only we are given the conditions to operate,” he said
