LAHORE: The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP), has expressed its dismay over the slowdown in growth of big industries, marking the tenth straight month of annual decline in Large Scale Manufacturing (LSM) production.
Mian Anjum Nisar, the vice president of the SAARC Chambers of Commerce and Industry said here on Sunday, that this decline in LSM production, which is far worst ever recorded in the history, as on a cumulative basis for 10MFY23, the growth is now down to 9.4 percent. He emphasizing the need for implementing the reforms agenda to achieve the 3.5% economic growth rate set in the budget 2023-24 to create jobs and reduce the public debt.
He said that the de-industrialization in the country began in 1988 due to the policies implemented under various programs of the International Monetary Fund (IMF). The signing of the Free Trade Agreement with China in 2005 has also badly damaged Pakistan’s industrial base since local industrialists failed to compete with the second largest economy of the world.
It is unfortunate that the share of industrial sector shrank from nearly 21% to 19.5%, which suggested that people were moving away from the manufacturing activities. The share of LSM sector, which stood at 11.7% under the old base year, has now shrunk to a mere 9.3%.
He said that the low GDP growth in Pakistan may result in pushing 20 million people below the poverty line as with such a growth rate job opportunities are not creating. He added that Pakistan’s economy needs up to seven percent growth rate to avoid falling of more people below the poverty line.
He said that the LSM has remained an important source of economic growth in Pakistan. Owing to the encouraging results of this sector in the previous fiscal year coupled with a low base effect, the government managed to show an overall 5.4% economic growth in 2020-21.
However, a constant decline in the share and growth of LSM may cause a lot of problems for the government that is struggling to create new jobs. The government has targeted 3.5% economic growth in the upcoming fiscal year. But the International agencies has projected that Pakistan’s economic growth would stand very low.
Mian Anjum Nisar said that LSM has remained an important source of economic growth in Pakistan. Owing to the encouraging results of this sector in the previous fiscal years coupled with a low base effect, the government managed to show overall 5.4% economic growth in 2021-22.
However, a constant decline in the share and growth of LSM may cause a lot of problems for the government that is struggling to create new jobs. The data shows that the Large Scale Manufacturing Industries (LSMI) output has declined by 9.39 percent during July-April 2022-23 as compared with the same period of last year, says the Pakistan Bureau of Statistics (PBS).
According to the provisional Quantum Index numbers of the Large Scale Manufacturing Industries (QIM), the LSMI output decreased by 21.07 per cent for April 2023 when compared with April2022 and 9.78 per cent when compared with March 2023. The LSMI Quantum Index Number (QIM) was estimated for April 2023 is 104.65.QIM estimated for July-April 2022-23 are 115.46.
The provisional quantum indices of LSMI for April 2023 with the base year 2015-16 have been developed on the basis of the latest data supplied by the source agencies i.e. the OCAC, Ministry of Industries and Production, Ministry of Commerce and Provincial Bureaux of Statistics (BoS).
The main contributors towards overall growth of -9.39per cent are, food (-1.52), tobacco (-0.65), textile (-3.53) garments (2.66), petroleum products (-0.75), chemicals (-0.48), cement (-0.87), pharmaceuticals (-1.41), iron and steel products (-0.22), electrical equipment (-0.44), and automobiles (-1.98).
The production in July-April 2022-23 as compared to July-April 2021-22 has increased in wearing apparel, furniture and other manufacturing (football) while it decreased in food, tobacco, textile, coke and petroleum products, pharmaceuticals, chemicals, non-metallic mineral products, machinery and equipment, automobiles and other transport equipment.
The sectors showing growth during July-April include wearing apparel (27.36 per cent), leather products (2.15), furniture (40.59per cent), and other manufacturing (football) (30.76per cent).
The sectors showing decline during the July-April include food (8.52 per cent), beverages (3.83 per cent), tobacco (27.45 per cent), textile (17.86per cent), wood products (64per cent), paper and board (7.10per cent), coke and petroleum products (11.24per cent), chemicals (6.43per cent), chemicals products (2.95 per cent increased), fertilizers (8.80per cent), pharmaceuticals (25.26 per cent), rubber products (8.61 per cent), non-metallic mineral products (11.76 per cent), iron and steel products (4.65 per cent), fabricated metal (15.12 per cent), computer, electronics and optical products (27.65per cent), electrical equipment (13.05 per cent), machinery and equipment (45.48per cent), automobiles (45.58per cent), other transport equipment (39.58per cent).
The petroleum products production witnessed a decline of 11.24 per cent during July-April 2022-23 as its indices went down to 88.47 from 99.6784 during July-April 2021-22.
Copyright Business Recorder, 2023
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