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Pakistan: The Year 2020 in Review
The COVID19 pandemic has been the biggest story in Pakistan and the rest of the world. It has complicated Pakistan's economic recovery as did the ever-present threat of political instability posed by the opposition parties trying to take advantage of the crisis. Gallup Poll data shows that 65% of Pakistanis are happy despite hardships of the coronavirus pandemic. On the external front, Pakistan faced India's massive global disinformation campaign against it. The year 2020 was a tough year for Pakistan and the world with both health and economic challenges. Pakistan's second COVID wave is now subsiding, the factories are humming, the exports are rising, and the remittances from overseas Pakistanis are at an all time high. Inflation is starting to come down. The nation has shown its resilience yet again by dealing with both challenges successfully. Here's a quick rundown of the year 2020 in Pakistan:
COVID19 Pandemic:
Pakistan has very weak health care infrastructure. This raised serious questions about Pakistan's ability to effectively respond as the pandemic caused by the novel coronavirus hit the country in March 2020. While the crisis is not over yet but it appears that Pakistan has been spared the worst impact in terms of infections and deaths seen elsewhere in the world. World Health Organization has included Pakistan among top 6 nations it has praised for effective handling of the pandemic. The key steps Pakistan took to contain the pandemic and soften its impact include:
1. Smart lockdown: Pakistan imposed targeted lockdowns in areas experiencing high rates of infections rather a nationwide lockdown imposed by others, including Prime Minister Narendra Modi's government in neighboring India. This action helped bring down the virus transmission while protecting the livelihoods of million of daily wage earners.
2. Testing and Hospital Surge Capacity: Pakistan ramped up test capacity and rapidly converted expo centers and other large buildings to increase hospital beds availability with the help Pakistani military personnel. Government also procured a significant number of ventilators and large quantity of personal protective equipment (PPEs) for frontline health workers.
3. Direct Cash Transfers: Prime Minister Imran Khan's government handed out Rs. 2,000 per family under Ehsaas Emergency Cash Program to the poorest households.
4. Tree Planting Campaign: Pakistan government launched a program to plant hundreds of million of trees as part of its reforestation campaign to deal with the effects of climate change.
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| COVID19 Positivity Rate in Pakistan. Source: Our World in Data |
Economic Recovery:
1. Construction Sector: Cement sales soared in 16.61% in the first 5 months (July-Nov 2020) of current fiscal year reaching an all time high of 24 million tons. Pakistan is on track to become the world's 6th largest cement producer by 2030.
Pakistan government announced Naya Pakistan housing program which offers Rs. 33 billion in direct subsidies for down payments for the first 100,000 applicants, according to media reports. In addition, the commercial banks are required to allocate 5% of their portfolio amounting to Rs330 billion for construction activities under this program. Pakistan’s mortgage finance to GDP ratio is just 0.25%, among the lowest in the world, according to the World Bank. A person earning Rs30,000 to Rs100,000 can build a house on a 5-marla lot with the mortgage financing at 5% and that of 10-marla at 7%.
2. Large Scale Manufacturing: Large scale manufacturing continued its recovery with 5.46% growth in the first 4 months (July-Oct 2020) in spite of COVID19. Textile mills and garment factories reported to be operating near full capacity in November, 2020, indicating further growth in the LSM sector.
3. Exports: Pakistan's exports for the month of December 2020 grew by 18.3% to highest-ever $2.357 billion, up from $1.993 billion in December 2019. The nation's exports are rising in spite of the COVID19 pandemic, growing for the 4th consecutive month in December, 2020. In November, the exports rose to $2.161 billion, up 7.67% from $2.007 billion in the corresponding month last year, according to data released by Pakistan Bureau of Statistics. Exports grew in home textiles (20%), pharma (20%), rice (14%), surgical goods (11%), stockings & socks (41%), jerseys & pullovers (21%), women’s garments (11%)and men’s garments (4.3%).
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| Pakistan Exports July-Dec 2020. Source: Arif Habib |
Pakistan's technology export growth is continuing to accelerate with a 51% jump in November 2020 over the same month in 2019. The country's tech exports rose 39% in the first 5 months (July-Nov) of fiscal year 2021 over the same period last year. This came on top of a 21% increase in FY 2020 over FY 2019.
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| Major Asian Economies Performance. Source: CNBC |
Pakistan exported $763 million worth of services related to telecommunications, computers and information technology from July to November 2020 period. This represented a 39% increase from the same period in 2019. In November 2020, the country exported IT services amounting to $168 million, a 51% jump from tech exports November 2019.
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| All-Time High Remittances From Overseas Pakistanis |
4. Remittances: Pakistan saw a sharp increase of nearly 27% to $11.77 billion in remittances from its diaspora in July-November period. This set a new record of over $2 billion in remittances for six consecutive months. Rising remittances have made up for Pakistan's continuing trade deficits. In fact, Pakistan has reported a current account surplus of $447 million in November, making it the fifth consecutive month of current account surpluses. In November 2019, Pakistan reported a deficit of $326 million. The current account surplus has reached $1.64 billion so far in the current fiscal year in July-Nov 2020. Pakistan reported a deficit of $1.74 billion for the same period last year.
5. Digital Economy: Pakistan's digital gig economy surged 69% during the COVID19 pandemic, putting the country among the world's top 4 hottest online freelancer markets, reported Payoneer, a global payments platform company based in Silicon Valley, in its latest report. Payoneer attributed it to government programs such as Punjab government's e Rozgaar program that has been offering free online courses in digital freelancing. The sudden rush to learn skills online boosted the demand for instructors. The Pakistan government filled this demand by hiring alumni of programs like e Rozgaar who were successfully participating in the gig economy.
6. Soaring Food Prices: Global food prices are soaring by double digits amid the coronavirus pandemic, according to Bloomberg News. Bloomberg Agriculture Subindex, a measure of key farm goods futures contracts, is up almost 20% since June. It may in part be driven by speculators in the commodities markets. These rapid price rises are hitting the people in Pakistan and the rest of the world hard. In spite of these hikes, Pakistan remains among the least expensive places for food, according recent studies. Annual inflation rate declined to 8% in December from 8.3% in November, 2020. It is important for Pakistan's federal and provincial governments to rise up to the challenge and relieve the pain inflicted on the average Pakistani consumer.
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| Pakistan's V-shape Economic Recovery in 2020 |
Political Opposition:
1. PDM Narrative: It took Stephen Sackur, a BBC journalist, to challenge the Pakistani Opposition's anti-military narrative twice in the last two years. First, Sackur did it with Hameed Haroon, the CEO of Pakistan's Dawn Media Group. More recently, Sackur did it again with Opposition politician Ishaq Dar. Feverish spinning by pro-Opposition media spinmeisters suggests that Sackur has done serious damage to the Pakistani Opposition's narrative about the Army and democracy in the country. By his aggressive questioning of Ishaq Dar, former Finance Minister and former Prime Minister Nawaz Sharif's close associate, Sackur has not only dismantled the Opposition parties' narrative but also clearly established former Prime Minister Nawaz Sharif is a convicted criminal and a hypocrite.
2. Najam Sethi's Analysis: Prominent Pakistani journalist and political analyst Najam Sethi, a strong critic of Prime Minister Imran Khan, sees desperation among the Pakistani Democratic Movement (PDM) leaders. In a recent interview with well-known journalists Raza Rumi and Murtaza Solangi on Naya Daur social media channel, Sethi said the Pakistani opposition, particularly PMLN, believe it is "now or never" for them.
Najam Sethi added that if the Pakistan Tehreek-e-Insaf government led by Prime Minister Khan survives the current 5 year term and succeeds in stabilizing the nation's economy, the ruling party will be re-elected for another 5 year term in 2023 with the support of what Sethi calls "Miltablishment" (a euphemism for Pakistani military). This, Sethi said, would mean that the PMLN would break up and lose its relevance. Sethi acknowledges there is genuine support for PTI in spite of Imran Khan government's failures in the first two years. This support is particularly strong among the youthful voters who are willing to forgive PTI's poor handling of the economy.
Modi's Anti-Pakistan Campaign:
1. Disinformation Campaign: EU Disinfo Lab, an NGO that specializes in disinformation campaigns, has found that India is carrying out a massive 15-year-long disinformation campaign to hurt Pakistan. The key objective of the Indian campaign as reported in "Indian Chronicles" is as follows: "The creation of fake media in Brussels, Geneva and across the world and/or the repackaging and dissemination via ANI and obscure local media networks – at least in 97 countries – to multiply the repetition of online negative content about countries in conflict with India, in particular Pakistan". After the disclosure of India's anti-Pakistan propaganda campaign, Washington-based US analyst Michael Kugelman tweeted: "The scale and duration of the EU/UN-centered Indian disinformation campaign exposed by @DisinfoEU is staggering. Imagine how the world would be reacting if this were, say, a Russian or Chinese operation".
2. Pakistan Dossier: Dr. Moeed Yusuf, Prime Minister Imran Khan's National Security Advisor, has said that "we have evidence to the T" of India's links to several terrorist attacks in Pakistan. In an interview with Indian journalist Karan Thapar, Dr. Yusuf mentioned specific terrorist incidents with Indian intelligence agency's fingerprints on them. Specifically, he mentioned terrorist attacks on Army Public School in Peshawar that killed 149 people including 132 schoolchildren. “Malik Faridoon who masterminded the attack from Jalalabad (in Afghanistan) was in touch with handlers at the Indian consulate as children were massacred in broad daylight,” he said. Yusuf also mentioned India's links to terrorist attacks on Chinese consulate, Pakistan Stock Exchange and Gwadar 5-star hotel. Kulbhushan Jadhav "has been caught with his pants down" India recently spent $1 million to bring about TTP, 4 other militant organizations' merger in Afghanistan Kashmiris should be made 3rd party in any India-Pakistan talks.
Pakistan Defense:
Pakistan military launched its first Defense AI Program for a Cognitive Electronic Warfare (CEW) at its Center for Artificial Intelligence and Computing (CENTAIC), according to media reports. Modern connected weapon systems generate vast amounts of data requiring artificial intelligence and machine learning software for speedy analysis and rapid decision-making on the battlefield. Modern electronic warfare requires the use of artificial intelligence and machine learning (AI/ML) to analyze vast amounts of data coming from a large number of sensors mounted on various military platforms deployed on the ground, in the air and on the seas. EW systems can collect a considerable amount of data about an enemy’s frequency use, radar deployment, and many other factors.
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| Happiness Survey. Source: Gallup Pakistan |
Happiness Survey:
Gallup "End of the Year 2020" Survey reported that 65% say they are happy in spite of the COVID19 pandemic. This is well above the 54% reporting they are happy in a global happiness survey. Among 41 countries surveyed by Gallup International, Pakistan ranks 4th on the Happiness Index, 17th on the Hope Index and 6th on the Economic Optimism Index.
Summary:
The year 2020 was a tough year for Pakistan and the world. There were simultaneous health and economic challenges. The COVID19 pandemic has been the biggest story in Pakistan and the rest of the world. It has complicated Pakistan's economic recovery as did the ever-present threat of political instability posed by the opposition parties trying to take advantage of the crisis. Polls conducted by Gallup Pakistan indicate that the government led by Prime Minister Imran Khan appears to be handling the dual challenge well. Poll data shows that 65% of Pakistanis are happy despite hardships of coronavirus pandemic. On the external front, Pakistan faced India's massive global disinformation campaign against Pakistan. Pakistan's second COVID wave is now subsiding, the factories are humming, the exports are rising, and the remittances from overseas Pakistanis are at an all time high. Inflation is beginning to decline.
Related Links:
Pakistan to Become World's 6th Largest Cement Producer By 2030
Pakistan's Response to COVID19 Pandemic
Pakistan Digital Economy Surged 69% Amid Covid19 Pandemic
Soaring Food Prices Hurting Pakistanis
Najam Sethi on Desperation in PDM Ranks
India's Firehose of Falsehoods Against Pakistan
Views: 342
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Comment by Riaz Haq on January 3, 2021 at 8:41pm
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#Pakistan to approve new #textile policy to raise #exports to $21 billion. Pak textile exports reached $6 billion in the first 5 months of current fiscal year (July-November 2020) almost 5% higher than last year while total exports reached $9.7 billion. https://www.arabnews.pk/node/1783906#.X_KaZlw6tUM.twitter
Pakistan’s top economic decision-making body, the Economic Coordination Committee (ECC), is expected to approve a new five-year textile policy this week, with incentives worth more than Rs900 billion ($5.6 billion) for the industry and an aim to increase exports to $21 billion in five years, officials have said.
Textiles make up more than half of Pakistan’s exports, but have lost ground to South Asian neighbors in recent years, hurt by chronic energy shortages and underinvestment in machinery.
But this year, after Pakistan lifted its comprehensive coronavirus lockdown in May while other countries in the neighborhood kept their economies closed, international textile orders have been diverted to Pakistan, leading to a nine-year record in exports. The South Asian nation has now drafted a new policy to augment the gains, officials say.
“The textile policy has already been approved by the prime minister, which will be presented in the ECC next week,” Aliya Hamza Malik, parliamentary secretary for commerce, told Arab News. “After ECC approval, the policy would be a pubic document,” she added, saying the government of the ruling Pakistan Tehreek-e-Insaf (PTI) party had granted Rs900 billion ($5.6 billion) in incentives to the textile sector in the new policy, the country’s third.
The textile industry, which comprises 46 percent of the total manufacturing sector and provides employment to around 25 million Pakistanis, contributes 8.5 percent to the GDP, according to the Pakistan Board of Investment. It also contributes 60 percent to overall exports and is one of the major earners of foreign exchange for Pakistan.
Despite a global economic slowdown due to COVID-19, Pakistan’s textile sector reached $6 billion exports in the first five months of current fiscal year (July-November 2020), which is 62 percent of total exports (worth $9.7 billion) and almost 5 percent higher compared to the same period last year, official data shows.
“Incentives and export facilitations have played a big role in making Pakistan a competitive exporting country,” Malik said.
The new measures aim to increase textile exports from $12.86 billion to $21 billion in the next five years, with a major focus on value addition, a draft of the policy seen by Arab News said. The document said electricity would be provided to the industry at the rate of US cents 7.5/kWh, RLNG at $6.5/MMBtu and system gas at Rs 786/MMBtu under the new policy.
The last two textile policies, for 2009-14 and 2014-19, had aimed to up exports to $25 billion and $26 billion respectively but the targets were not achieved. The third policy was approved in March this year but still awaits official announcement.
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#Pakistan #PTI govt expects broad-based recovery in 2021 supported by “fast-tracked #CPEC projects,” revival of #industrial activities and increase in #exports. Finance ministry estimates the Ehsaas #poverty alleviation program will expand significantly. https://www.dawn.com/news/1599618
Last year was a historically difficult year. How do you foresee the year ahead?
Pakistan has done better in terms of managing the Covid-19 crisis and stimulus measures taken by the government have led to a recovery of economic activity. The record Rs1,240 billion stimulus package, the largest in Pakistan’s history, provided cash assistance to 15 million vulnerable families, supported SMEs and private-sector businesses and large industries to shield workers and avoid bankruptcies. On top of this, the historical construction package announced by the prime minister has led to additional spending of Rs300bn in the construction sector, a significant boost to the economy and creation of new jobs. The agriculture sector and small farmers have benefited from higher support prices and subsidies on fertiliser, bank credit and other farm inputs (seeds, tractors etc).
We believe that the ground realities are supportive of a broad-based economic recovery in 2020-21 as already evident from strong growth in the manufacturing and services sectors.
The shift of the farming community towards more profitable crop options can threaten food security. Is there a strategy to ensure the production of sufficient food crops and cattle stock?
The agriculture sector has stagnated over the last decade with zero growth and its share in GDP has shrunk from 21.4pc in 2012-13 to 19pc in 2017-18 while the import bill of major agricultural commodities peaked at $4bn (2017-18). Crop yields are one of the lowest in the world and crops are not resistant to pest and weather challenges.
To tackle these problems and boost the farm output, the government launched the Prime Minister’s National Agriculture Emergency Programme in July 2019 involving 16 projects of Rs309.7bn to boost the yields of major crops. The share of the federal government’s spending will be Rs85bn, share of provincial governments will be Rs175bn and the share of farmers will be Rs50bn. In addition, to conserve and increase productivity of water, three projects costing Rs220bn focused on watercourse lining and small dams have been launched. Also, the government has earmarked Rs23.6bn for establishing four new markets and upgrading infrastructure in 54 existing agricultural markets in Punjab.
Supporting industrialisation is crucial but will the government audit the outcome of cheap credit, tax breaks, subsidies and concessions to the business community to assess the impact on jobs and revenue generation?
(The MoF did not comment if it has any plans to audit the outcome of cheap credit, tax concessions and other subsidies but blamed the “reckless policies of the previous regimes to have led to de-industrialization of Pakistan through loss of competitiveness”.) Not only did Pakistan industry lose its share in the global export markets but most manufacturers were unable to even compete at home due to cheaper imports.
Our government is focused on reversing this trend and has significantly scaled up support to the manufacturing industry, in particular the export industry in the shape of cheap energy and export incentives.
These incentives and subsidies are performance-based. The performance is monitored by the relevant ministries and government departments. We are encouraged by the results so far.
Did you see the suspension of the IMF programme in February last year a blessing in disguise as it opened a window to be generous towards businesses and offer an amnesty scheme for investment in the construction sector?
The IMF is a key development partner for Pakistan and has provided valuable financial and technical support during the current year. This includes $1.4bn support to Pakistan in April 2020 under the Rapid Financing Instrument (RFI) to support the Covid-19 response and stabilise the economy.
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#Construction boom in #Pakistan: #Cement sales up 15.9% in first 6 months of FY 20-21 to 23.61 million tons from prior year's 20.38 million tons. #Exports up 14.6% to 5.017 million tons in July-December 2020 from 4.38 million tons in July-December 2019. https://www.cemnet.com/News/story/170099/a-promising-start-to-the-n...
The cement industry in Pakistan kicked off the FY20-21 on an exciting note. During the first six months of the current fiscal year, total cement dispatches grew by 15.7 per cent, from 24.751Mt in July-December 2019, to 28.628Mt in July-December 2020. Local dispatches have increased by 15.9 per cent in July-December 2020 to 23.61Mt from 20.373Mt in July-December 2019. Exports also increased from 4.377Mt in July-December 2019 to 5.017Mt in July-December 2020, showing a growth of 14.6 per cent.
Sources note that this is the reflection of the uptick in demand accompanied by the government incentives for the construction sector and steady cement price recovery can further unlock value.
They also predict local dispatches and exports to grow by 16 and 38 per cent YoY, whereas total industry utilisation is estimated to reach 85 per cent in FY20-21. On the pricing front, cement prices are forecast to average at PKR558 (US$3.47) and PKR617/bag in the north and south, respectively in FY20-21.
Construction package
Prime Minister Imran Khan last week announced that the fixed tax regime for the construction sector that was introduced earlier this year had been extended to 31 December 2021. "I want to give [the construction sector] good news for the new year. We have extended the fixed tax regime to 31 December 2021," the Prime Minister said during a live address to the nation.
APCMA concerns
A spokesman of All Pakistan Cement Manufacturers Association (APCMA) mentioned that the rising trend of coal, electricity and diesel prices is affecting the cement sector. During the last six months coal prices have increased by almost US$35/t. Furthermore, duty and taxes on cement sector are also very high. Cement is subject to federal excise duty at PKR1500/t and PKR75/bag, and general sales tax at 17 per cent (PKR77/bag). Total direct taxes on cement per bag are PKR152/bag. He requested the government to give tax concessions on the cement sector which will reduce the cost of production, giving a boost to construction activities and employment in the sector.
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“The natural, geographical and cultural environments of China and Pakistan are very different from each other, so during construction, we worked out measures to adapt to local conditions and shared our construction experience with our Pakistani friends.”
https://www.thenews.com.pk/print/770493-china-s-construction-giant-...
This was stated by Dong Zhihong, deputy general manager of Asia Pacific Division, China Civil Engineering Construction Corporation (CCECC), in an interview with China Economic Net (CEN).
Take the mountainous areas in Pakistan as an example. “It is difficult to conduct construction work there as the geological conditions are not that favorable.”
Therefore, “blasting, protection, and support of high slope, tunneling and excavation technologies are applied to the construction project site after certain improvement and optimization,” Mr. Dong added.
At present, the commencement order was issued by the employer, and work including the take over of the site, the construction of temporary camps for administration office and dormitory, the construction of temporary facilities (batch plant, canteen), and the removal of existing avionics facilities on the runway was completed.
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Overseas #Pakistanis send in $14.2 billion in #remittances from July-Dec 2020, up 25% from the same period last year. This has helped #Pakistan have current account surplus of over $1.7 billion in the first half of FY 2021. https://twitter.com/ArifHabibLtd/status/1347557098234798082?s=20
Prime Minister Imran Khan on Friday thanked Pakistani diaspora for keeping remittances above $2 billion for sixth consecutive month.
"I want to thank our overseas Pakistanis for yet another record-breaking month of remittances in Dec: $2.4 bn," the premier wrote on his official Twitter handle.
He said that first time in Pakistani remittances have been above $2 billion for sixth consecutive months.
"Total for 6 months of this fiscal year $14.2 bn - a 24.9% growth over last yr [year]," he further wrote on the microblogging site.
Cumulatively, in the first five months (July-November) of current fiscal year, remittances grew 27% to $11.77 billion compared to the same period of last year, revealed figures released by the State Bank last month.
The SBP said persistent efforts by the government and central bank to bring remittances under the Pakistan Remittance Initiative (PRI) and rising use of digital channels amid limited cross-border travel were some of the important factors behind the sustained improvement in workers’ remittances.
In a statement, the SBP pointed out that orderly exchange market conditions and improvement in global economic activity lent further support to the increase in remittances.
Taurus Securities Head of Research Mustafa Mustansir said that the growth in remittances came because Pakistanis, who had lost their jobs abroad, were transferring their savings ahead of their return home amid the Covid-19 pandemic.
The situation would normalise in the second half (January-June) of current fiscal year 2020-21, meaning that the spell of layoffs would come to an end and remittances would slow down during that period, he said. “Cumulatively, workers’ remittances are estimated to grow 6.5% to $24.6 billion in FY21 (compared to $23.1 billion in FY20),” he said.
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#Pakistan launches Special Technology Zones Authority. #imrankhanPTI said that the main objective of the establishment of special #technology zones was to give incentives to the #IT sector to make it flourish for the benefit of the country. #Digital https://www.dawn.com/news/1600514
Prime Minister Imran Khan said on Friday that information technology was a revolutionary sector that needed to be exploited by companies in the country to meet the demands of the contemporary world.
Addressing the launching ceremony of the Special Technology Zones Authority (STZA) here, he said that only those companies gained during coronavirus pandemic that adapted to IT well in time.
The premier said that the main objective of the establishment of special technology zones was to give incentives to the IT sector to make it flourish for the benefit of the country.
Urges companies to take benefit of information technology
He said that with the second biggest youngest population in the world, Pakistan could utilise the IT sector in providing employment to its youth. Also, the Pakistani nationals working in other countries could benefit from the special technology zones.
He said that a great responsibility lay on STZA Chairperson Amer Ahmed Hashmi for creating a boom in the IT sector of Pakistan.
Earlier, the prime minister launched the STZA which would focus on the growth of the scientific and technological ecosystem.
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Tweet by Muzammil Aslam:
LSM hit double digit 14.5% in Nov-20, First 5 months 7.4%. As I predicted double digit growth will hit soon. My Full year forecast still intact 4-5%. So far no body had this confidence SBP, GoP, WB, ADB, IMF and local research houses & experts.
https://twitter.com/MuzzammilAslam3/status/1348999522890952706?s=20
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Tweet by Hammad Azhar:
LSM has posted a growth of more than 14% in November compared to same time last year.
Pakistan is successfully reversing the tide of deindustrialisation that began in 2008. Capacity enhancements, new investments and modernisations are already in play.
https://twitter.com/Hammad_Azhar/status/1348987827502116865?s=20
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Tweet by Asad Umar:
Excellent news of large scale manufacturing (LSM) growth numbers for november. Jul to nov LSM growth is now 7.4% and the month of November growth is 14.5% vs Nov 2019. Industrial growth is clearly accelerating
https://twitter.com/Asad_Umar/status/1348987218426097670?s=20
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Large Scale Manufacturing (LSM) in Pakistan grew by 14.5 per cent in November 2020 as compared to the same month in 2019, the fresh data released by Pakistan Bureau of Statistics (PBS) on Tuesday showed.
https://profit.pakistantoday.com.pk/2021/01/13/lsm-growth-up-by-14-...
The LSM index output was increased by 14.46 per cent for November, 2020, compared to November, 2019 and 1.35 per cent when compared to October 2020.
As per the data, the overall output of LSM index increased by 7.41 per cent during the five months (July-November) 2020-21 compared to July-November 2019-20.
The growth during the five month period was primarily accredited to various sectors, including Textile, Food, Beverages & Tobacco, Coke & Petroleum Products, Pharmaceuticals, Chemicals, Non Metallic Mineral Products, Automobiles, Fertilisers, and Paper & Paperboard.
Once the industries reopened after the lockdown due to the outbreak of Covid-19, they started showing significant growth. According to the PBS data, considerable growth was recorded in the Food, Beverages & Tobacco sector at 21.28 per cent. The textile sector showed a growth of 2.4 per cent, Non Metallic Mineral Products recorded a 20 per cent jump and pharmaceuticals registered an increase of 12 per cent during July-November 2020 as compared to the same period in 2019.
On the other hand, a major decline recorded during the five months period was for the Wood Products sector, with a drop of 65 per cent. The Leather sector was the next to register a 43 per cent decline.
Furthermore, the Iron & Steel Products, Electronics and Engineering Products declined by 3.6 per cent, 18 per cent and 32 per cent, respectively.
LSM constitutes 80 per cent of the country’s total manufacturing and accounts for nearly 10.7 per cent of the overall national output. In comparison, small-scale manufacturing accounts for just 1.8 per cent of the gross domestic product (GDP) and 13.7 per cent in manufacturing.
The production of 11 items under the Oil Companies Advisory Committee (OCAC) showed a growth of 0.09 per cent whereas 36 items under the Ministry of Industries and Production increased by 5.46 per cent. The 65 items reported by the Provincial Bureaus of Statistics recorded growth of 1.85 per cent during July-November 2020 as compared to July-November 2019.
In November 2020, the items under the Ministry of Industries had recorded the major growth of 12.36 per cent to contribute overall monthly growth of 14.46 per cent as compared to the same month in 2019.
“Industrial growth is clearly accelerating,” said Minister of Planning, Development and Special Initiatives Asad Umar in a tweet.
He claimed that the growth in November was the highest growth in big industries in any month during the past 12 months.
Separately, the Federal Minister for Industries and Production Hammad Azhar also shared the data of the LSM growth on Twitter, saying that the it has shown a growth of more than 14 per cent in November 2020.
Hammad Azar said that Pakistan is successfully reversing the tide of deindustrialization that began in 2008.
The minister said that capacity enhancements, new investments, and modernizations are already in play.
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#Moody's Investor Service:"Pakistan economy will return to growth in fiscal year 2020-21, gaining a modest 1.5 per cent and accelerate to 4.4 per cent in 2022." #Pakistan #economy #COVID19 https://www.khaleejtimes.com/business/economy/pakistan-economy-to-r...
Key takeaways
Economic activity will remain below pre-outbreak levels, although the economy should return to modest 1.5% growth in fiscal year 2021
GDP growth will accelerate to 4.4% in 2022
Long-term credit growth potential is strong, given Pakistan's large unbanked population
Profitability will come under some pressure in 2021 after a huge 625-basis-point interest rate cut last year
Private-sector lending to grow between 5% and 7% in 2021, below inflation expectations of 8%
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