The Pakistan Federation of Chambers of Commerce and Industry (FPCCI) said that positive growth in large-scale manufacturing (LSM) will contribute to achieving the annual economic growth goal, in addition to creating jobs if the trend continues in the coming months.
LSM production reported a substantial growth of 7.65 percent in September, according to data in addition to reporting a growth of 4.8 percent during the first quarter of the current fiscal year.
While addressing a delegation of different industries, FPCCI President Mian Anjum Nisar said, “Industry growth has shown a ray of hope for the revival of the country’s economic activities.” Expressing concern, he added that during the second wave of Covid-19 in the country, the October 2020 data could be crucial to sustaining the momentum of industrial production.
He reported that LSM production had fallen alarmingly by 10.17 percent year-on-year during the year 2019-20. After suffering from the damage caused by the coronavirus pandemic, mainly in the construction, sugar, automotive and pharmaceutical sectors, industrial production now clearly reflects a revival in Pakistan’s economic activity.
The government has set the economic growth target at 2.1 percent for the current fiscal year, which will increase in the current economic situation, but is not adequate to generate employment for a growing population.
The substantial decrease in interest rates and the decrease in duties on raw materials are expected to further boost economic activity in the current fiscal year, as production activity showed that more than half of LSM’s sub-sectors increased in September, Nisar stated.
As the Covid-19 outbreak had adversely affected the world economy as well as Pakistan’s trade and industrial sectors, the FPCCI leader called for out-of-the-box solutions for economic development.
Nisar suggested that the government should formulate long-term and clear policies to revitalize industry and significantly increase exports, as Pakistan’s exports have remained stagnant in comparison to regional countries.
“Production costs, weak governance, outdated technologies, lower productivity, lack of competition, supply constraints, and energy issues are some of the impediments to industrial development,” he added.
