Business

Contraction in LSM output dims prospects of growth this fiscal year

Published

2 years ago

Farwa

PBS data shows LSM output drops by 25% in March.
Big industries output witnessed highest-ever decline since COVID-19.
Steep contraction will increase pace of inflation, put jobs at risk.

ISLAMABAD: A steep contraction in output of large-scale manufacturing (LSM) in March has faded the prospects of achieving a positive growth figure, The News reported Tuesday.

The delay in the revival of the International Monetary Fund (IMF) programme has choked the economy consequently the LSM contracted massively; as a result, it can halt economic activities, boost already-high inflation and increase unemployment.

Although the Ministry of Finance has projected a provisional GDP (gross domestic product) growth rate of positive 0.8% in its revised estimates, the latest figures of LSM for March 2023 demonstrate that it remained negative by 25%, compared to the corresponding month of the last year.

The big industries’ output witnessed the highest-ever decline since COVID-19 pandemic. In the first nine months (July-March) of the outgoing fiscal year, the LSM witnessed a contraction of 8.1%.

“Keeping in view the performance of the industrial and agriculture sector, the provisional growth figure may turn into negative up to -1%. Earlier, the efforts were underway for turning the provisional figure into positive ranging from 0 to 0.5%,” sources confirmed to The News.

The National Accounts Committee (NAC) is scheduled to hold its meeting within the ongoing week to calculate the provisional growth figures for the outgoing financial year 2022-23.

Dr Khaqan Najeeb, former finance ministry adviser, said the industrial sector had been unable to secure letters of credit due to the country being in a dollar liquidity crunch.

The lack of access to imports has hurt industrial production as evident in the fall of LSMI output by 8.11% in the first nine months (July-March) of 2022-23.

“The revival of the IMF programme would have ensured a flow of dollars from multilaterals, bilateral and commercial monies to ease the imports and unclog the economic activity,” he said.

“It is likely that growth would be muted in the outgoing fiscal year with a contraction in the manufacturing and agriculture sector. This would create further unemployment and rise inflation due to shortfall in supplies,” he concluded.

Business

SFD and Pakistan Sign Two Deals Totaling $1.61BLN

Published

2 days ago

Farwa

Two agreements totaling $1.61 billion have been inked by Pakistan and the Saudi Fund for Development to improve their bilateral economic cooperation.

Business

Saudi Arabia and Pakistan sign an MOU to strengthen their auditing industry collaboration.

Published

2 days ago

Farwa

A spokesperson for the office of the Auditor-General of Pakistan (AGP) announced on Monday that the two countries have signed a Memorandum of Understanding (MoU) to strengthen cooperation in public sector auditing through improved cooperation between audit institutions of both countries, as well as training programs and the exchange of trainers.

This comes as a group from Saudi Arabia’s General Court of Audit (GCA), headed by GCA President Dr. Hussam bin Abdulmohsen Alangari, arrived in Pakistan on Sunday for a four-day visit.

The agreement was signed during AGP Muhammad Ajmal Gondal’s meeting with the Saudi delegates, aiming to strengthen audit cooperation, enhance knowledge-sharing, and improve governance, transparency and accountability in government spending.

Public relations officer Muhammad Raza Irfan of the AGP’s office told Arab News that the deal will further advance bilateral collaboration between Saudi Arabia and Pakistan in addition to enhancing professional ties between the two nations’ auditing institutions.

In a statement released from his office, AGP Gondal was cited as saying, “This collaboration marks a significant step toward fostering international cooperation in auditing.”

“The exchange of ideas and methodologies will undoubtedly strengthen our capacity to meet emerging challenges and set new benchmarks for public accountability.”

Discussions at Monday’s meeting focused on fostering closer ties between the Supreme Audit Institutions (SAIs) of Pakistan and Saudi Arabia, sharing innovative audit methodologies, and planning collaborative initiatives for the future, according to the AGP office.

The two parties decided to increase their knowledge of theme, environmental, and impact audits as well as to exchange best practices in audit standards, performance audits, and citizen participation audits.

The statement added, “It also agreed to exchange trainers, address new auditing challenges, plan cooperative audits, including a performance audit on the oil and gas sector in 2025, and work together on training programs.”

Both sides reaffirmed their shared commitment to promoting transparency, accountability and excellence in public sector auditing.

Business

The government chooses to continue the PIA privatization process.

Published

2 days ago

Farwa

The Pakistan International Airlines (PIA) privatization process will be restarted by the federal government, and expressions of interest would be requested within the month. Officials stated that the Prime Minister’s Committee on Privatization will convene to make the final decision.

Usman Bajwa, the secretary of the Privatization Commission, gave a briefing on the updated procedure to the National Assembly Standing Committee on Privatization. Additionally, he disclosed that airlines other than PIA are now able to compete with regional carriers thanks to IMF-approved aircraft tax concessions.

Farooq Sattar, the chairman of the privatization committee, underlined the importance of giving PIA workers at least five years of job security. Employee protection will continue to be a top priority and will be resolved prior to bidding, the Privatization Commission promised.

PIA’s liabilities totaling Rs650 billion have already been assumed by the government, and an additional Rs45 billion in outstanding debts must be paid before the privatization process can begin. As of the now, PIA has assets around Rs155 billion and liabilities worth Rs200 billion. It will be necessary for the new buyer to expand the fleet by 15 to 20 aircraft.

Additionally, the Privatization Committee has sought a timeline for the privatization of Faisalabad, Gujranwala, and Islamabad Electric Supply Companies. Officials stated that after the appointment of a financial advisor, the privatization process for these companies will accelerate.