LSMI output growth rebounds to 0.92% in FY24

August 16, 2024 (MLN): Pakistan's Large-scale Scale Manufacturing Industries (LSMI) output growth rebounded in fiscal year 2023-24 driven by improved confidence and recovery in various sectors, although the pace of growth remains below the necessary threshold.

LSMI output grew by 0.92% in FY24 compared to a contraction of 10.30% in FY23, the Pakistan Bureau of Statistics (PBS) reported today.

The performance of the LSM is a key indicator of the overall industrial health, and it is assessed monthly through the Quantum Index of Large Scale Manufacturing Industries (QIM).

Historically, LSM dominates the manufacturing sector of GDP, accounting for 69.3% of Manufacturing and 8.2% of the overall GDP.

The government expects this recovery that began in FY24 to continue throughout FY25, driven by a stable exchange rate, macroeconomic stability, and relaxed import restrictions.

Economic activity began to rebound in the second half of FY24. However, global demand slump, currency devaluation, and a widening current account deficit severely limited the government's flexibility, particularly in maintaining fiscal discipline amidst stringent financial conditions.

It's important to note that increasing exports without substantial products to export is futile.

The dependency on imports is evident in sectors like automobiles, where a considerable portion of auto parts is sourced from abroad due to the absence of domestic fabrication.

This reliance on costly imports depletes a substantial portion of the country's foreign reserves and poses a significant hurdle in the national economy.

The main contributors towards overall growth of 0.92% are, Food (0.30), Tobacco (-0.42), Textile (-0.93) Garments (1.19), Petroleum Products (0.63), Chemicals (0.41), Pharmaceuticals (0.80), Non Metallic Mineral Products (-0.36), Iron & Steel Products (-0.22), Electrical Equipment (-0.31), Automobiles (-0.62) and Furniture (0.37).

In June alone, LSMI output decreased by 0.03% when compared with June 2023 and by 4.70% when compared with May 2024.

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