ISLAMABAD: Production of large-scale manufacturing (LSM) declined by 5.5 percent in November 2022 compared to the same month a year ago due to the government’s handling of inflation, dollar weakness and import restrictions. has a policy, JEE News reported Wednesday.
According to data released by the Pakistan Bureau of Statistics (PBS), the affected sectors include textiles, food, garments, chemicals, automobiles, cement and fertilizers.
Production rose 3.55 percent in the previous month in October 2022. Meanwhile, in the five months from July to November 2022, average production fell by 3.58 percent compared to the same period last year.
The government’s policy to curb inflation with interest rate hikes and “quantitative tightening” has made bank financing more expensive. In addition, the lack of dollar and the government’s strict policies to restrict imports are severely detrimental to the industrial sector. Over the past few months, factories have reduced their working days/hours, and especially since last month, some have shut down their units on inventory shortage due to non-availability of foreign exchange to import raw materials. It has been reported.
Along with the decline in industrial production, Pakistan’s gross domestic product (GDP) may also suffer as this sector contributes about one-fifth of the economy. The federal government has also indicated that the growth rate may be closer to 3 percent against the target of 5 percent.
The World Bank in its latest “World Economic Prospects Report” has estimated Pakistan’s GDP growth rate at 4 percent for FY23.
Earlier, the Asian Development Bank (ADB) had also forecast GDP growth of 3.5 percent in FY23 mainly due to fiscal restraint to control fiscal and external imbalances. Is.
Depreciation of the rupee will reduce demand, coupled with capacity and input constraints caused by higher import prices, will reduce industry output.
In June, the government had set an economic growth target of 5 percent in the federal budget 2022-23.
July 2022 was the first month in nearly two years that LSM growth slowed, with LSM production down 16.5% from June 2022 and 1.4% from July 2021.
PBS’s latest monthly bulletin on the LSM showed most sectors with negative growth in November 2022. Interestingly, only five of the 25 industry categories covered by the LSM data showed positive growth, including apparel, leather products, furniture, football, beverages, coke and petroleum products.
However, sectors with a higher weighting in LSM’s quantum index number declined in production. These were textiles, food, iron and steel, chemicals, automobiles, pharmaceuticals, cement, and non-metallic mineral products.
On a year-on-year basis, in November 2022, 22% in textile production, 8.34% in pharmaceuticals, 13% in non-metallic minerals, 13.6% in food, 8.7% in iron and steel, 7.06% in chemicals production (which out of which production of chemical products) by 6.15% and fertilizer by 7.74%) and cement production also decreased by 12.1% compared to the same month last year.
Similarly, the production of machinery and equipment also decreased by 56 percent, automobiles by 18.97 percent, fabricated metals by 18.4 percent, and rubber products by 9.3 percent. a 29.8 percent increase in computer, electronics, and optical products; Compared to November 2021, production of wood products decreased by 80.5 percent, tobacco by 20.25 percent, paper and board by 1.7 percent and other transportation goods by 41 percent.
Among the few sectors that showed positive growth were apparels by 49.7 percent, leather products by 9.84 percent, furniture by 36.4 percent, footballs by 55.6 percent, beverages by 9.97 percent and coke and petroleum products by 5.26 percent.
Compared to the same period in FY22, production during July-November FY23 has increased only by 51.48% in garments, 9.84% in leather, 99.3% in furniture, and 59.7% in footballs.
While 7.78% in food production, 5.4% in beverages, 22.3% in tobacco, 11.45% in textiles, 63.6% in wood products, 2.8% in paper and board products, 13.6% in coke and petroleum products, pharmaceuticals There was a decrease of 2.3 percent. Rubber products grew by 9 percent, non-metallic mineral products by 12.35 percent, computer, electronics and optical products by 17.17 percent, machinery and equipment by 41.2 percent and automobiles by 28.7 percent. In addition, production of wrought metal decreased by 18.23 percent, iron and steel production by 0.87 percent, and other transportation equipment by 42 percent compared to the same period last year.
