Shrinking LSM
Industrial sectors continue to suffer under domestic and international pressure, with a new report showing that large-scale manufacturing shrank almost 5.5 per cent in November compared to the same month in 2021, continuing a downward trend that began in the summer, as economic problems and extreme austerity measures began approaching their peak. Although official PBS data is only available up till November, the six weeks since then have not seen any remarkable recovery, causing fear among experts of mass layoffs, even in the usually-resilient textile sector. In fact, some analysts say the worst is yet to come, because the suspension of gas supplies for industries in favour of residential users during the cold winter months will obviously lead to reduced production.
The contractions are also hurting export-oriented industries, while essential imports such as energy, food and several types of raw materials continue to hover around record highs, which means that the currency crisis will continue to worsen. A few sub-sectors that saw growth — garments for instance — were heavily reliant on locally-produced raw materials such as cloth and yarn, which saw massive contractions, meaning it is highly likely that domestic producers will probably not be able to cover the supply needs of the garments sector. Similar declines were also seen in the production of steel and several other raw materials, and a decline was also seen in pharma production. Beyond the export implications, this could directly affect the cost of healthcare. But even pricey healthcare will take a back seat to the fresh wave of food inflation caused by declining cooking oil, rice, and wheat output, exacerbated further by the holdups at Karachi’s ports.
Unfortunately for the millions of people that are suffering, solutions are still not forthcoming — every political leader seems to have their own secret plan, until it comes time to actually implement one.
Published in The Express Tribune, January 20th, 2023.
Like Opinion & Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.