ISLAMABAD - The large-scale manufacturing (LSM) index witnessed negative growth of 2.3 percent during seven months of current fiscal year indicating that economic activities have decelerated in the country.

The LSM growth had declined by 2.3 percent in July-January period of the fiscal year 2018-19 as compared to the corresponding period of previous year, reported the Pakistan Bureau of Statistics (PBS). Similarly, the LSM growth went down by 4.64 percent during January 2018 as against the corresponding period of previous year.

The slowdown in LSM growth indicates that economic activities have decelerated in the country. The tightening of monetary policy and massive depreciation of the rupee have increased the cost of production for the big industries, which are posting negative growth. The incumbent government had already downward revised the country’s GDP growth target to 4.2 percent from projected 6.2 percent due to several reasons. These included a policy of fiscal consolidation adopted by the government due to higher than anticipated fiscal deficit on the conclusion of last fiscal year, downturn in agriculture, negative growth in manufacturing sector and the expected programme of the International Monetary Fund (IMF).

The industrial sector was expected to get boost from improved energy supply, public sector expenditure and the mega-initiatives under the China-Pakistan Economic Corridor to develop infrastructure, energy resources, roads, railways and bridges.

The LSM data, provided by the Ministry of Industries and Production for 36 items, showed negative growth of 1.72 percent during the first seven months of the FY2019 over a preceding year. Similarly, the data provided by the provincial Bureaus of Statistics for 65 items showed negative growth of 0.28 percent over the same period. The output of 11 items, whose data is provided by the Oil Companies Advisory Committee, had decreased by 0.3 percent during the period under review. The negative growth is mainly the outcome of dip in production of iron and steel products 9.13 percent, pharmaceutical products 9 percent, followed by automobiles 5.24 percent, coke & petroleum products 4.78pc, food, beverages & tobacco 4.26pc, chemicals 3.9pc, non metallic mineral products 2.23pc and paper and board by 2.46 percent during July to January period of the current fiscal year.

As far as the main drivers of the LSM sector’s growth during the period under review are concerned, electronic products sector recorded growth of 19.22 percent, followed by wood products that grew by 18.12 percent.

 Engineering products recorded 12.42 percent growth. Similarly, fertilizer sector grew by 5.81 percent. Meanwhile, rubber products had also recorded growth of 3.33 percent during the period under review.

In the automobile sector, the production of tractors went down by 29.18 percent, trucks 20.88pc and motorcycle production declined by 9.39pc. The production of light commercial vehicles had declined by 11.51pc during first seven months of the ongoing fiscal year. However, the production of buses had enhanced by 12.41 percent. However, production of jeeps and cars had enhanced by 1.73 percent.

In non-metallic mineral products, cement posted a negative growth of 2.72 percent. In the food, beverages and tobacco segment, an increase of 3.24pc was recorded in cooking oil production. Other item that had witnessed a decrease of 03.7pc was tea blended.