Syed Maaz says IMF restrictions raise cost of production, weaken competitiveness
ISLAMABAD, DEC 14 /DNA/ – The All Pakistan Business Forum (APBF) has urged the government to reduce excessive reliance on donors and the International Monetary Fund, warning that externally imposed fiscal conditions are distorting the economy, driving up power and gas tariffs and sharply increasing the cost of production for industry.
In a statement, President Syed Maaz Mahmood said repeated hikes in electricity and gas prices under IMF programmes have placed an unbearable burden on businesses, especially export-oriented and small and medium enterprises. They said that while fiscal discipline is important, policies driven primarily by donor conditions without regard for domestic economic realities are undermining industrial competitiveness and long-term growth.
Syed Maaz Mahmood said the continued reduction in power subsidies and strict circular debt targets are translating directly into higher tariffs for consumers and businesses. He noted that rising energy costs are feeding into inflation, weakening purchasing power and squeezing already thin industrial margins. According to him, frequent tariff adjustments, fuel cost surcharges and debt servicing levies have created uncertainty, making it difficult for businesses to plan production or investment.
Chairman Ibrahim Qureshi added that Pakistan’s industrial sector is being asked to bear the cost of systemic inefficiencies in the power and gas sectors, including line losses, poor recoveries and delayed reforms. Instead of fixing governance and operational failures, he said, the burden is shifted to consumers and taxpayers through higher tariffs and budgetary injections, which ultimately slows economic activity.
APBF Chairman said IMF-driven policies are increasingly narrowing the government’s policy space and limiting its ability to support domestic industry. He pointed out that high electricity and gas tariffs are making Pakistani products uncompetitive in regional and global markets at a time when neighboring countries are offering cheaper energy and targeted incentives to exporters.
He stressed that rising energy prices are not only hurting large industries but are also devastating small manufacturers, traders and agricultural value chains. Higher power and gas costs increase production expenses across sectors, leading to higher prices for essential goods and contributing to persistent inflation. This, he said, creates a vicious cycle of declining demand, lower output and job losses.
The APBF leadership said reliance on IMF loans and donor funding has become a short-term survival strategy rather than a sustainable economic solution. They warned that repeated borrowing under stringent conditions is pushing the economy into a cost-push inflation trap, where higher taxes and tariffs reduce growth instead of stabilising finances.
Syed Maaz Mahmood emphasised the need for structural reforms driven by local priorities rather than donor templates. He called for urgent reforms in power distribution companies to reduce theft and technical losses, timely tariff determinations, improved recoveries and greater accountability. He said that without fixing these root causes, increasing tariffs will only worsen the problem.
He urged the government to focus on indigenous solutions, including energy sector reforms, promotion of low-cost power generation, and investment in domestic resources such as hydropower, coal and renewables. He said cheaper and reliable energy is essential for reviving industry, boosting exports and creating employment.
The APBF also called for meaningful consultation with the business community before finalising agreements with international lenders. The leadership said policies that directly affect production costs, employment and investment should not be decided without stakeholder input.
