The large scale manufacturing sector, generally known
for negative growth, has taken a turnaround by hitting an aggregate
growth rate of 15 percent during the current financial year.
The growth was even surprising while looking at
certain sectors especially, the textile, automobile, cement which have
achieved a feat of over 80-86 percent growth reassuring that the economy
has really taken a kick start.
Automobile sector has, however, taken a lead by
displaying 86 percent growth during first ten months of the fiscal
2003-04. Automobile production has gone up from 36,430 units during the
first seven months of 2002-03 to 60,673 units in the same period of the
current financial year. According to official figures about growth in
auto sector, car production went up by 65.90 percent, jeep 123.83
percent, Light Commercial Vehicles 3.69 percent, trucks 7.37 percent,
buses 5.67 percent, tractor 51.29 percent and motorcycles 67.37 percent.
Similarly, the cement sector which had made
impressive results, is approaching to a situation where industry runs at
full of capacity. Currently, the cement units are near 87 percent of
capacity utilization indicating the rapid growth in the development
projects in the country.
Though the textile sector has shown a low growth rate
as compared with other sectors yet in terms of exports, it is about to
make history by hitting the mark of $10 billion dollar in the remaining
two months of the financial year. As against the export target of $8.7
billion, the textile industry has already surpassed the target and the
total exports during first nine months were estimated at $8.9 billion.
The pattern of export performance shows that it will be an epoch making
year in the history of the textile sector by attaining an unparallel
export of $10 billion this year.
The Iron and Steel production also registered a
growth of 9.27 percent. A break-up of different products in steel
industry shows that pig iron/metal indicated 12.67 percent, cast/rolled
billet 12.13 percent, hot rolled coils/plates 0.34 percent, cold rolled
coils remained unchanged. Glass sheet production increased by 10.66
percent, cement 14.41 percent, bicycles 6.72 percent, motorcycles 17.71
percent and motor tubes 10.80 percent.
Sugar went up by 20.83 percent, cigarettes 10.32
percent, cotton yarn 2 percent, cotton cloth (mill sector) 13.71
percent, cotton cloth (non-mill sector) 4.98 percent, jute goods 11.94
percent, sacking 37.25 percent, paper and board-paper 11.84 percent,
printing 17.76 percent, packing 13.33 percent, chip board 0.89 percent,
soda ash 3.54 percent and caustic soda 13.21 percent.
In the fertilizer sector, urea production increased
by 4.77 percent, ammonium nitrate 10.60 percent, nitrogen phosphate
31.29 percent and fertilizer phosphate 98.80 percent.
The financial sector also played a significant role
by enabling the large manufacturing sector to achieve impressive growth
reflected in the increased off-take by the private sector from the
banking sector. According to an estimate, the off-take was almost double
in the first nine month of the current financial year.
The commercial bank loans to industries increased to
Rs233.6 billion from July-March as against Rs83.2 loans disbursed during
the same period of the previous year.
According to a report, the production during first 8
months of the current financial year has increased by 15 percent as
compared to 6.3 percent during the same period of the last year.
Banking sector also supported the textile industry
for heavy investment especially on imports of machinery and equipment
worth $2 billion in the textile industry to meet the growing exports.
Growth in large-scale manufacturing sector was in
fact a strong indicator that the policies and decisions taken by the
economic managers have started producing the desired results, which have
also been acknowledged both by the IMF as well as the World Bank.
A recent IMF statement while appreciating the strong
economic growth says that Pakistan is clearly on the right course,
however, the significant gains in the fight against poverty are not yet
visible. IMF has expressed the hope that given the authorities' track
record over the last few years, IMF was optimistic that strong growth
will continue, setting the stage for a reduction in poverty. Ultimately,
Pakistan's growth outlook will depend on the authorities' ability to
continue with sound fiscal and monetary policies and to maintain the
momentum of advancing broad-based structural reforms to foster private
sector development in the country. Strengthening implementation capacity
will be crucial to improving public service delivery to the poor as well
as adequate resources being provided to key social sectors.
IMF has supported Pakistan's economic reform program.
Pakistan has decided to discontinue with IMF after completion of PRGF in
December 2004. This will be a very important milestone for Pakistan
following a long history of financial assistance from the IMF; these
compliments were paid in the IMF statement.