Pakistan economy shows signs of Recovery
ISLAMABAD - Pakistan’s Large Scale Manufacturing (LSM) output increased by nearly 10% during December 2019 according to the Pakistan Bureau of Statistics (PBS).
The LSM output increased 9.66% in December over the same month of the last year i.e. December 2018 and 16.4% when compared with November 2019, breaking the cycle of continuous decline according to PBS.
The latest monthly increase was led by a 41.57% growth in food and beverages, 33.4% in paper and board and 16.1% in leather products. This shows that all the key economic sectors appear to be coming back on track.
Sector-wise, production of 11 items under the Oil Companies Advisory Committee edged up by 1.23%, 36 items under the Ministry of Industries and Production went up by 10.69% while 65 items reported by the Provincial Bureaus of Statistics inched higher 8.6%.
Ossama Rizvi, an economic and geopolitical analyst stated, ”This is indeed a great news which will be send a positive and promising signal to the investors around the world and hopefully it can bring in FDI instead of FPI – as we are in dire need of the former. Pakistan’s currency is stabilizing – a good sign. A further adjustment might help LSM further. The need for efficiency in energy usage and an affordable price are the key points to work on.”
However, during the first half of the fiscal year, the output shrank by 3.4% in July, from almost 6% in the first five months of the fiscal year, missing the annual target of 8.1%.
The extended downward trajectory of LSM contributed to the overall economic slowdown, as the State Bank of Pakistan estimated the economy to grow by 3.5% in 2019-20. All three data collection authorities registered a decrease in production in the first half over the preceding fiscal year.
Oil Companies Advisory Council, logging outputs of 11 oil and petroleum products, measured a fall of 0.66%. Ministry of industries, measuring output trend of 36 items, recorded a 1.78% decline in production. Provincial bureau of statistics, overseeing the production of 65 products, logged 0.92% negative growth.
The production in Jul-Dec 2019-20 as compared to Jul-Dec 2018-19 has increased in Food, Beverages & Tobacco, Non-Metallic Mineral Products, Fertilizers, Paper & Board and Leather products while it has significantly decreased in Coke & Petroleum Products, Pharmaceuticals, Automobiles, Iron & Steel Products, and Electronics.