Positive LSM growth to help achieve annual economic growth target

LAHORE: Mian Anjum Nisar, former president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and president of the Businessmen Panel, expressed his hope that positive growth in large-scale manufacturing (LSM) will help achieve the annual economic growth target. If the trend continues in the coming months, it creates employment.

Mian Anjum Nisar was speaking at a meeting held to discuss the problems and solutions of trade and industry. The meeting was also attended by the leadership of the Businessmen Panel, including FPCCI president Nasir Hayat Magun, FPCCI senior vice president Shahzeb Akram, PIAF president Mian Nauman Kabir and former LCCI president Irfan Iqbal Sheikh. The BMP leadership at the meeting promised to continue its efforts towards the cause of the business community through the FPCCI platform.

Mian Anjum Nisar observed that the output of Pakistan’s major industries increased 7.4% in the first five months of the current fiscal year, thanks to the acceleration of growth sustained for the third consecutive month, which is a beacon of hope for economic recovery.

The head of the FPCCI ruling group said that the large-scale manufacturing sector experienced cumulative growth in July-November of the current fiscal year, but the industry has not yet reached production levels seen before the first wave of the coronavirus hit the country. end of February last year.

He said that industrial production, which was damaged for months caused by the corona epidemic, in the construction, sugar, automobile and pharmaceutical industries, now clearly reflects a revival in economic activities in the country.

For the current fiscal year, the government had set its economic growth target at 2.1 percent; this will be better in the current economic situation, but not enough to create jobs for a growing population.

While 10 of the 15 main sectors recorded positive growth, the production of five sectors contracted in the first five months of the current fiscal year. The LSM industry grew by 14.5% year-on-year in November, the highest LSM growth, but also that the index remained below 160 points recorded in March last year, the index still rising. 147 on November 2020.

Mian Anjum Nisar said that the decline in interest rates and the reduction of taxes on raw materials are expected to further boost economic activity in the current fiscal year. He said that the growth has broken a continuous cycle of contraction over the past year.

He said that large businesses bear the brunt of very high interest rates, the problems of the Federal Revenue Board, and high energy prices. Annualized LSM growth may slow in December 2020 due to high base effect.

Among the sectors that decreased in production were iron and steel, whose production decreased by 3.7% in the July-November period, 18% electronics, 43% leather products, 32.6% engineering products and 65% wood products. He said the World Bank has released a new report showing a bleak picture of the Pakistani economy. On a monthly basis, the LSM industry only grew 1.4% in November compared to October 2020. Data collected by the Oil Companies Advisory Committee (OCAC) showed that the first of 11 industry types recorded an average growth of only 0.09%. five months of the current fiscal year. He said that Pakistan needs economic growth of 6-7% per year to reduce poverty and unemployment.

The former head of FPCCI said that the industrial sector made a major contribution to tax collection and that the industry’s share in revenues was almost three times its contribution to overall economic output.

Mian Anjum Nisar called for ready-to-use solutions for economic growth as COVID-19 negatively impacted the world economy as well as Pakistan’s trade and industrial sectors.

He said the government has already missed its annual export target for the first two years. The export target for the current fiscal year was readjusted at $ 27.7 billion and required growth of at least 6 percent.

Updated: January 16, 2021 — 2:42 pm

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