Islamabad, June 8, 2023: According to the Pakistan Economic Survey 2022-23, the manufacturing sector has faced significant setbacks due to the impact of high interest rates, import restrictions, and the global economic slowdown.
The survey, released on Thursday, outlined several factors contributing to the industry’s decline and emphasized the challenges faced by businesses, consumer confidence, and investment.
The report pointed out that the proliferation of risks, including the global economic slowdown and flood damages, along with the State Bank of Pakistan’s (SBP) restrictive policies, such as high interest rates, import restrictions, and the closure of Letters of Credit (LCs) to address balance of payments issues and control inflation, have created headwinds for the manufacturing sector. As a result, the industry’s performance experienced a slowdown during FY2023.
During the period of July-March FY2023, the Large Scale Manufacturing (LSM) sector recorded a negative growth rate of 8.11 percent, contrasting with the growth rate of 10.61 percent observed in the corresponding period last year.
READ MORE: Pakistan Economic Survey 2022-23: Agriculture Grows by 1.55% Amid Flood Devastation
However, there were a few sectors that witnessed growth, including Wearing Apparel, Leather Products, Furniture, and others (Football).
The mining and quarrying sector also faced challenges, with a negative growth rate of 4.4 percent during July-March FY2023 compared to a dip of 7.0 percent last year. Inadequate infrastructure, limited technology, and insufficient financial resources hindered the development of the mining sector.
In terms of specific minerals, coal, dolomite, barium sulphate, limestone, rock salt, and ocher experienced growth rates of 17.6 percent, 42.2 percent, 53.6 percent, 10.6 percent, 12.4 percent, and 15.4 percent, respectively, during July-March FY2023.
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However, there were negative growth rates for natural gas (9.3 percent), crude oil (10.2 percent), chromite (12.6 percent), magnesite (50.0 percent), gypsum (5.0 percent), sulphur (25.0 percent), soapstone (43.2 percent), and iron ore (51.6 percent).
Overall, the Pakistan Economic Survey 2022-23 highlights the challenges faced by the manufacturing sector, primarily due to high interest rates and import restrictions, as well as the global economic slowdown. These factors have significantly impacted the industry’s performance in the fiscal year.
READ MORE: Pakistan Economic Survey 2022-23: A Challenging Year
