The second nationwide breakdown in three months halted Pakistan’s industrial and logistic activities.
Over $4 million has been lost by traders in Pakistan’s commercial capital Karachi.
A senior official at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said on Monday that Pakistan had suffered economic losses of over $300 million due to a breakdown in the national electrical grid.
Thousands of Pakistanis were frustrated by a power outage lasting up to 24 hours in some parts of the country. An economy that has been in a tailspin for months has resulted in foreign reserves running out inflation at historic highs and slowing industrial growth.
It was the second countrywide power outage in three months halting industrial and logistical activities.
Pakistan generates $1 billion worth of economic activities daily, with around $200 million of industrial production, Memon Abdul Jabbar, V.P. of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), told Storyline’s correspondent on Tuesday.
According to estimates, Pakistan’s economy suffered over $300 million in losses following Monday’s power failure, including transportation costs and other logistics and services.
Syed Naveed Qamar, Energy Minister Khurram Dastgir Khan, and Industries Minister Syed Murtaza Mahmud did not respond to repeated calls and messages seeking comment.
Karachi, Pakistan’s largest city and commercial capital has suffered over $4 million in losses due to largely suspended production activities.
As a result of the power outage, Karachi’s trading activities had already decreased by 60-70 percent according to Atiq Mir chairman of the All Karachi Tajir Ittehad business association.
We estimate that the suspension of business activities [due to the power outage] has cost over Rs3 billion ($4.3 million) in losses.”
Similarly, businesspeople in Lahore, Pakistan’s second-largest city described the situation as resembling war conditions or the peak of a Coronavirus outbreak.
Our correspondent reported, that most trading and industrial activities were suspended and even those with standby power generation facilities suffered the longest power outage in history.
Rana Tariq Mehboob chairman of the Chain store Association of Pakistan (CAP) and member of LCCI’s Central Executive Committee said that.
“The situation was as if we were at war, or like COVID-19 when everything was shut down including industries and retail,” Rana said, noting that the breakdown caused around 30 percent of the national economy to suffer.
Traders, especially importers, were already struggling before the power outage with more than 7,500 containers worth $1.8 billion stuck at ports and industries facing a shortage of raw materials due to a worsening foreign exchange crisis.
Consequently, the government has restricted imports of goods including industrial raw materials to prevent dollar outflows while commercial banks have stopped issuing letters of credit (LCs) preventing importers from obtaining the greenback for orders already placed.
Furthermore, Pakistan’s inflation rate has reached a multi-decade high while the country awaits the completion of the 9th review of the IMF bailout program that will allow the disbursement of $1.1 billion in external financing.
As a result of problems, related to the opening of letters of credit for imports and clearing of goods piling up at ports. Pakistani industries are facing a shortage of raw materials and higher inflationary pressure.
Follow us on Twitter, Facebook, Instagram, and LinkedIn for the latest news and reviews. Visit our website at: www.storyline.pk
