Ayesha Mudassar

The industry-wise production halts reflect the rising cost of doing business domestically coupled with the prevailing unfavourable global market conditions, experts say. Talking to WealthPK, General Manager Engineering Development Board Asim Ayaz said, “The country’s development is deeply linked with the industrial sector’s growth. However, all-time high interest rates, massive rupee devaluation, sky-rocketing prices of raw material, high energy tariffs, and lower global demand have affected the performance of the sector.”

Furthermore, the unintelligent decision to restrict the import of inputs to save dollars has adversely affected the industrial output, WealthPK explored. The large-scale manufacturing (LSM) index – a key indicator of industrial activity – decreased by 3.7% in the first half of the current fiscal year (H1FY23) compared with a growth of 7.7% in H1 FY22, as per the World Bank’s recent report. The contraction was wide-ranging, with 18 out of the 22 sectors (accounting for 89.6% of the index) registering lower production.

Source: Pakistan Bureau of Statistics (PBS)

According to the data released by the Pakistan Bureau of Statistics (PBS), the LSM output decreased by 11.59% in February 2023 when compared with February 2022. Talking to WealthPK, Pharmaceutical Manufacturer Association Chairman Syed Farooq Bukhari said the manufacturers were witnessing a tremendous rise in the cost of production. “The dwindling foreign reserves and eroding rupee value have considerably reduced the country’s ability to import essential medicines or active pharmaceutical ingredients used in production, which in turn lowered the pharma output.”

Likewise, the major sectors – textile and automobiles – also observe the same situation.Talking to WealthPK, Mohammad Ayoub, an auto parts manufacturer, said heightened inflation had adversely affected the industry with a significant reduction in production. “The current situation requires chalking out effective strategies to bring the costs down and improve the industries’ competitiveness in the international market,” he added.

Credit: Independent News Pakistan-WealthPk