Barrack Obama has been re-elected to a second-term as the President of the largest global economy-the US,which is also the biggest buyer of textile and apparels in the world.However the biggest worry on the mind of an expert from Pakistan is on how the new House and Senate will address the challenge of a large fiscal deficit.
According to Mr Shahzad Salim–Former Central Chairman of Pakistan Readymade Garments Manufacturers and Exporters Association(PRGMEA),"If they do not come to an agreement on tackling the issue,automatic cuts come in to effect.These could mean a 4 percent cut in the annual budget of the US".
If the US administration does not tackle the issue,an automatic budget cut also called the'Fiscal Cliff'will come in to effect."This will mean a budget cut of 4 percent or a whopping US$607 billion in 2013",says the Congressional Budget Office(CBO).These cuts will also apply for subsequent years.
This is the figure,which mainly worries Mr Salim.He says,"The cuts will be immediate and stringent,which could have a big impact on global exports of textiles and apparel,since the government also spends a large amount of money on both these goods".
"I can only hope that these automatic cuts donot come into effect as it will have a catastrophic impact on not just the textile and apparel sector,but all industrial sectors across the globe",he wound up by saying.
