Chamber flags trade deficit, energy costs and weak investment despite easing inflation
LCCI President Faheemur Rehman Saigol. Photo (file)
LAHORE:
President of the Lahore Chamber of Commerce and Industry (LCCI), Faheemur Rehman Saigol, has described 2025 as a year of gradual economic stability for Pakistan but warned that major structural challenges continue to restrict sustainable growth.
According to a statement issued on Tuesday, Saigol said several economic indicators improved during the year. However, issues including a widening trade deficit, high energy costs, slow investment and a limited tax net remain serious obstacles for the economy.
Emphasising ease of doing business, he said investors require predictable policies and lower costs to invest confidently in domestic industries. He expressed concern over high electricity prices, misuse of statutory regulatory orders and delays in export policy reforms. He also called for bringing exports back under the final tax regime to support exporters.
Saigol said the trade deficit continues to pose a major challenge and requires urgent attention. He welcomed the recent privatisation of Pakistan International Airlines, noting that its acquisition by a Pakistani consortium reflected growing local investor capacity. He added that privatisation of other state-owned enterprises should be pursued.
Reviewing broader trends, he said consistent policies, economic reforms and strong remittance inflows helped improve the business climate and restore confidence for investment, exports and industrial activity.
He highlighted that remittances reached about $38.3 billion in FY2024-25, a 26% increase from the previous year, and are expected to approach $42 billion by year-end. Remittances during JulyNovember FY2025-26 exceeded $16 billion, showing over 9% growth year-on-year, according to official data.
Saigol said strong inflows supported foreign exchange reserves, stabilised the rupee and reduced import pressures. He also cited a sharp decline in inflation, with average inflation falling to 4.5% from 23.4% a year earlier, easing pressure on consumers and businesses.
He noted improved market confidence, reflected in the KSE-100 index surpassing 170,000 points, higher foreign exchange reserves and reduced interest rates, which lowered borrowing costs. Despite growth in IT exports, he said investment remained below expectations due to high energy costs. He concluded that lasting growth requires continued reforms in energy, exports and taxation.
