The output of Pakistan’s Large Scale Manufacturing Industries (LSMI) declined by 25% year-on-year (YoY) in March 2023, according to data released by the Pakistan Bureau of Statistics (PBS) on Monday. The index stood at 115.31, down from 153.72 in March 2022.
On a month-on-month (MoM) basis, the LMI output declined by 9.09%, from 126.84 in February 2023.
The decline in LMI output was attributed to a range of factors, including:
- Weak macroeconomic conditions, such as high inflation and a depreciating rupee.
- Monetary tightening by the central bank.
- Supply chain disruptions caused by the COVID-19 pandemic.
- An increase in energy costs.
- Political instability in the country.
The decline in LMI output is a major concern for the Pakistani economy. The manufacturing sector is a key driver of economic growth and employment, and its decline is likely to have a negative impact on both.
The government is taking a number of measures to address the challenges facing the manufacturing sector, including:
- Providing financial assistance to businesses.
- Reducing energy costs.
- Improving the ease of doing business.
It remains to be seen whether these measures will be enough to reverse the decline in LMI output. However, it is clear that the government is aware of the importance of the manufacturing sector and is committed to supporting its growth.
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