ISLAMABAD - The government has faced an economic setback as large-scale manufacturing (LSM), a major contributor in country’s GDP growth, has recorded negative growth of over one percent during February 2014 over January.
According to the latest figures of Pakistan Bureau of Statistics (PBS) released on Thursday, the country’s LSM has registered negative growth of 1.03 percent in February 2014 over its previous month. The LSM sector was performing well during ongoing financial year, which helped in pushing the GDP growth to higher side of 4.1 percent during first half (July-December) compared to 3.4 percent of previous year.
However, the decline in manufacturing has rung the alarming bell for the incumbent government, which is successfully receiving massive loans from different sources. The government aims to achieve GDP growth to over four percent during ongoing financial year 2013-14 on the assumption of better performance of the industrial sector, specifically the LSM sector. However, the sudden decline in growth of this sector (LSM) might not able the government to achieve the target of economic growth of over four percent. Industrial sector has 20.9 percent share in Pakistan GDP while LSM being a sub-sector of manufacturing has 10.6 percent share.
Sources said that government could not achieve the target of GDP growth if industrial sector did not perform well. The international financial institutions like International Monetary Fund, Asian Development Bank and World Bank had already projected that Pakistan could not achieve the economic growth target of 4.4 percent during current fiscal year, as they projected that it would remain at less than four percent. The Asian Development Bank has projected Pakistan’s economic growth at 3.4 percent, slighter higher than estimation of IMF of 3.1 percent and World Bank at 3.6 to 4 percent for the FY14. However, according to the PBS figures, the LSM sector has witnessed growth of 5.16 percent during eight months (July-February) of the ongoing fiscal year 2013-14 over the corresponding period of previous year. The Quantum Index Number (QIM) of LSM industries stood at 120.51 points during July 2013 to February 2014 period as compared to 114.59 points of the corresponding period of its preceding year, showing an increase of 5.16 percent. Meanwhile, according to the PBS figures, growth in LSM was mainly driven by 11 categories of items in the July-February period of 2013-14 over the corresponding period of last year. Major contribution towards positive growth was from textile 1.47 percent, food and beverages 10.66 percent, petroleum products 6.74 percent, paper and board 6.83 percent, fertilizers 24.19 per cent, electronics 6.33 percent, iron and steel products 3.47 percent, leather products 14.87 percent, chemicals 8.13 percent, non-metallic mineral products 1.24 percent and rubber products 8.16 percent. However, some sectors like wood products witnessed a decline of 7.21 percent, engineering products 22.18 percent automobiles 0.86 percent and pharmaceutical 0.3 percent during the months under review.