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Millions of jobs in formal and informal sectors of the economy across Pakistan have been lost this fiscal year, national media reported on Sunday, as the ongoing economic and financial downturn in the country caused a massive decline in industrial production.

According to the Pakistani newspaper Dawn, restrictions on the import of raw materials, a foreign exchange crisis and high costs of electricity and gas have severely hindered production activities, resulting in the closure of industries and a slowdown of business.

Several industrial sectors have been hit hard by the current economic crisis, with textile and auto factories closing, resulting in the loss of millions of jobs. 

Rising cost of living caused by surging gas and electricity bills have also hampered production activities.

The city of Karachi, which is the financial and commercial capital of Pakistan, has seen an estimated 500,000 people losing their jobs, according to the Karachi Federation of Industry. 

The head of the Karachi SITE Association of Industry (SAI) President Riazuddin said “Except for the food sector, around 100,000 people out of the 500,000 in the SITE area had lost their livelihood in different categories of industries, mainly from October 2022 till date,” referring to Karachi's Sindh Industry and Trade Estate (SITE), Dawn reported.

Countless such stories have contributed to our harrowing economic saga over the last one year. Investors turning away from Pakistan. Industries closing down. Unemployment rising. Business confidence declining. 220 million Pakistanis paying the price for regime change.

— Hasaan Khawar (@hasaankhawar)

Riazuddin also estimated that the decline in industrial activities in the region had been between 30% and 40%, adding “I think 50 per cent more industries will close down after the withdrawal of the Rs 19.99 power tariff and $9 per MMBtu gas tariff.”

Riazuddin said that since July 2022, several government departments, such as the Sindh Bureau of Statistics (SBS) have been actively trying to obtain unemployment data from industries. However, businessmen are reluctant to provide any job loss data, fearing harassment, Dawn reported.

According to the Pakistan Bureau of Statistics, the unemployment rate was 4.45% in 2020. However, the actual unemployment rate is believed to be much higher due to the large informal economy in the country, which makes it difficult to accurately measure the rate of unemployment.