The growth momentum in big industries remained robust in February 2022 – the second last month of Pakistan Tehreek-e-Insaf (PTI) government – as industries recorded 8.6% growth despite headwinds that could slow the pace in the remaining period of current fiscal year.
Large-scale manufacturing (LSM) industries recorded 8.6% growth in February over the same month a year ago, the Pakistan Bureau of Statistics (PBS) reported on Friday.
It was the second consecutive month when the index stood higher than the previous month.
However, the State Bank of Pakistan (SBP) has changed the policy gear and increased the policy rate to 12.25% - a rise of 5.25% in the past few months.
The central bank has also imposed more restrictions to cool down demand, which may impact the growth rate in the coming months.
The PTI government’s over three-and-a-half-year rule ended in April. During his tenure, former prime minister Imran Khan focused on the construction sector.
The new government has decided to revive the stalled International Monetary Fund (IMF) programme, which may also result in fiscal and monetary tightening to bring economic stability. This could also hurt future growth prospects.
The central bank has injected hundreds of billions of rupees into the economy, which provided a fresh impetus to the economic growth but fueled inflation in the country.
The government has targeted 4.8% economic growth for the current fiscal year. The International Monetary Fund (IMF) and other financial institutions have projected Pakistan’s economic growth in the range of 4% to 4.3%, which is a decent rate but nearly half of what is required to create jobs for all new entrants in the market.
Overall, the LSM sector posted 7.8% growth during the July-February period of current fiscal year, according to the PBS.
LSM data is collected from three different sources. Data collected by the Oil Companies Advisory Council (OCAC) showed that the output of 36 items increased on an average by 1.2% in the first eight months of current fiscal year.
The Ministry of Industries, which monitors 11 products, reported 7.3% increase in output during the July-February period. Provincial Bureaus of Statistics reported 9.5% growth in the output of 76 goods, stated the PBS.
The industries that posted growth in the first eight months of FY22 included textile, which registered 2.9% growth.
The textile industry is the largest sector in the LSM index, having 18.2% weight. The production of apparel wear increased one-fifth during the first eight months of FY22.
The output of food industry increased 3.3% during the period under review. Beverages sector production grew 1.7%, which was slower than the previous reading.
Coke and petroleum products’ output showed only 1.2% growth while chemicals’ output rose 7.1%, according to the national data collecting agency.
The output of automobile sector increased 60%. The iron and steel sector saw a growth of 17.3% while the manufacturing of leather products rose 3.1%.
The paper and board sector grew 8% and wood products’ output expanded 174%.
The output of pharmaceutical sector decreased 2.3% during the first eight months of current fiscal year while rubber products’ output decreased 23%.
Published in The Express Tribune, April 16th, 2022.
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