With Covid19 Under Control, Pakistan Enjoys V-Shaped Recovery in Manufacturing

With coronavirus spread contained, Pakistan economy is rebounding with V-shaped economic recovery.   Pakistanis have once again defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. The nation's monthly Quantum Index of Manufacturing (QIM) for July 2020 has returned to where it was a year ago in July 2019, according to data released by Pakistan Bureau of Statistics.  Meanwhile, the number of daily new cases has declined from over 6,000 a day in June to around 500 a day now. There has also been dramatic reduction in hospital admissions and the need for intensive care. The LSMI output increased by 5.02% for July, 2020 compared to July, 2019 and 9.54% in June, 2020.  The recovery in manufacturing is quite broad, extending from cement production to fuel sales and growing demand for automobiles to home appliances, according to Bloomberg News.  Pakistan has successfully overcome the challenges posed  by the pandemic and its economic impact. Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.


Covid19 Cases in Pakistan. Source: Our World in Data

Broad Recovery: 
The recovery in manufacturing is quite broad, extending from cement production to fuel sales and growing demand for automobiles to home appliances, according to Bloomberg News. The nation's monthly Quantum Index of Manufacturing (QIM) for July 2020 has returned to where it was a year ago in July 2019, according to data released by Pakistan Bureau of Statistics.  Meanwhile, the number of daily new cases has declined from over 6,000 a day in June to around 500 a day now.  There has also been dramatic reduction in hospital admissions and the need for intensive care. The LSMI output has increased by 5.02% for July, 2020 compared to July, 2019 and 9.54% if compared to June 2020. Month-wise trend of QIM from July, 2018 to July, 2020.    
Pakistan Monthly Quantum Index of Manufacturing. Source: PBS

Cement Sales: 

Pakistan is once again experiencing a construction boom with new incentives under Naya Pakistan Housing Program. Monthly cement sales rose to near all-time high of almost 5 million tons in July 2020 as construction activity picked up in both housing and CPEC-related projects. 

Pakistan Cement Sales. Source: Bloomberg

Car Sales:

Gasoline sales in June, 2020 hit new record  and local car deliveries rose to about 10,000 units as people returned to work after easing of lockdown in May, 2020. Kia Motors Corp.’s local unit is planning to add a second shift at its factory in Karachi from January.  

Pakistan Car Sales Recovery. Source: Bloomberg

Multiple Sectors Growing: 

Sectors including food, beverages & tobacco, coke & petroleum products, pharmaceuticals and non metallic mineral products saw an increase in production in July 2020.  Muzzammil Aslam, chief executive officer at Tangent Capital Advisors Pvt., was quoted by Bloomberg as saying, “It has surprised everybody".  Aslam expects Pakistan economy at 4%-5% in current fiscal year, higher than the government’s 2.1% target. “The growth is led by an aggregate demand push.”

Summary:
Pakistanis have defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. Pakistan has successfully fought off the deadly COVID19 virus and begun to bounce back economically. Moody's rating agency has raised Pakistan's economic outlook from "under review for downgrade" to "stable". Pakistan's Planning Minister Asad Umar is talking of a "V-shaped recovery". Monthly cement sales have rebounded to pre-pandemic level, fuel sales have increased, tax collection is up,  exports are rising and the Karachi stock market is booming again. Prime Minister Imran Khan and Army Chief General Javed Bajwa have been on the same page in tackling the health and economic crises faced by Pakistan. Contrary to the critics of Pakistan's civil-military ties,  Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.

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Comment by Riaz Haq on November 25, 2020 at 11:06am

India ranks 34th in global Covid resilience survey, placed below Pakistan and Bangladesh
According to the Covid Resilience Ranking by Bloomberg, 12 Asian countries have scored better than India in handling the coronavirus pandemic.

https://theprint.in/india/india-ranks-34th-in-global-covid-resilien...


India has been ranked 34th among 53 countries in the world that have handled the coronavirus pandemic most effectively, according to a Covid Resilience Ranking by Bloomberg.

The survey was published Tuesday and gives India a resilience score of 58.1, way below top performer New Zealand which has a score of 85.4. Pakistan, with a score of 61.7, has performed better than India and was ranked 27th, whereas Bangladesh, with a score of 64.2, was placed at the 24th position.

---------------

Effective testing and tracing is a hallmark of almost all the top 10, embodied in South Korea’s approach. The country approved home-grown diagnostic kits within weeks of the virus’s emergence, pioneered drive-through testing stations and has an army of lightning-fast contact tracers who comb through credit card records and surveillance camera footage to track down clusters. Like Japan, Pakistan and other parts of Asia, Korea has drawn on recent epidemic experience after suffering an outbreak of Middle East Respiratory Syndrome, or MERS, in 2015.

In contrast, developing countries like Pakistan and Bangladesh have benefited from their relative remoteness. Their populations are also much younger on average, which has helped hold down their overall mortality rates. Limited testing and poor-quality data obscures the picture in these places, though under-reporting of cases and deaths is occuring everywhere.

https://www.bloomberg.com/graphics/covid-resilience-ranking/?sref=4...

Comment by Riaz Haq on January 23, 2021 at 9:07am

Why are #Chinese #car makers setting up shop in #Pakistan? Master Chang'an Motors, a Pakistan-Chinese #automotive joint venture recently sold out 6 months’ production of its first compact sedan car Alsvin within five days of market launch. https://www.scmp.com/week-asia/economics/article/3118875/why-are-ch... via @scmpnews

The sell-out success of the Chang’an Alsvin sedan is the latest Pakistani-Chinese joint venture to have raised eyebrows in the automotive world
Chinese car firms seeking new avenues for growth, while hampered in India, see Pakistan as an entry point to the right-hand-drive markets of South Asia

The stock-clearing sale of 15,000 Chang’an Alsvin passenger vehicles is the latest in a series of headlines about joint ventures between privately held Pakistani conglomerates and Chinese state-owned automotive enterprises.
The Alsvin is assembled at a US$136 million plant near the port city of Karachi owned by Master Chang’an Motors (MCM), established in 2017 as a 70:30 joint venture between the local Master Group and leading Chinese carmaker Chang’an Automobile. In addition to the 30,000 units a year of the Alsvin, it began producing two pick-ups and a multi-purpose vehicle in 2018.
Shanghai-based SAIC Motor, owner of the British car brand MG, this month broke ground at the site of a US$100 million plant near Karachi which is expected to begin production of three small-engined sports utility vehicles, or SUVs, next year.

KA Hanteng Motor, a joint venture with China’s Hanteng Automobile, is building a US$50 million plant in Pakistan and is expected to start making 15,000 SUVs and passenger cars this year.

Al-Hajj FAW, a Karachi-based joint venture formed in 2012, ramped up production of hatchbacks last year to 20,000 vehicles.
When the Master Group proposed the joint venture to Chang’an Automobile in 2016, it did so with the ambition of leveraging the estimated US$60 billion China-Pakistan Economic Corridor (CPEC) to gain access to other Asian markets targeted for investment under the Belt and Road Initiative, MCM’s chief executive Danial Malik said.

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