The triple hit combo of high base-effect (in some sectors), monetary tightening, and reduced development spending by the government has already slashed growth in Pakistan’s large-scale manufacturing (LSM). The recently reported nine-month LSM number is the worst in recent memory: negative 0.90 percent.

A few months ago, in its last monetary policy statement, the central bank had called it a “notable moderation” expected to be witnessed during FY19, which according to the bank is “a short-term cost of pursuing macroeconomic stability.”

What an economist calls stability, a politician calls loss of voter sentiments. Which explains the various budgetary reliefs to host of sectors such as footwear, tanners, leather, gloves, furniture, ceramics, sanitary, home appliances, infant formula, chemicals – in addition to removal of super-tax from non-banking companies.

The LSM-heavy cotton yarn and cloth production remains poor despite a low base-effect in that particular sector. One hopes that the promissory notes will rescue the sector will kick off growth, albeit it is too early to pin hopes to that given the often slips between promises and reality, and that cotton production is estimated to decrease by 9 percent year on year.

In automobile segment, cars sales have been growing so far. But that may well be driven by the fact that both Honda and Toyota will be announcing another price hike very soon, which is why consumers are perhaps trying to purchase vehicles now rather than paying a higher price later on. If that is indeed the case, then expect an auto slowdown in LSM in the ensuing months.

Citing “anecdotal evidence” the central bank says in its recent State of Economy report, that as agriculture segment underperformed during the kharif season, “it negatively affected the sales of bikes and three-wheelers.” Weakness in two-wheeler therefore may continue in the rest of the year.

Little wonder then that in light of these factors, and the growth in Wholesale Price Index, the central bank expects that the LSM sector to “face headwinds in the forthcoming quarters.”