EVEN though statistically large-scale manufacturing (LSM) output continues to contract due to the Covid pandemic and its impact in terms of global supply chain disruptions and the resumption of the International Monetary Fund (IMF) structural adjustment programme, all is not bad news on the economic front.

As the recent estimates from the Pakistan Bureau of Statistics (PBS) show, there has been a 7.5 per cent expansion in the LSM sector, particularly in response to the State Bank of Pakistan’s (SBP) liquidity injection and recovering demand for cement, cars, tobacco, building material and pharmaceutical products. It is evident that the economy has turned the corner with a breathing space for a few sectors to grow and promise sustainability.

However, what should not be ignored in the midst of such a recovery is the fact that its nature is fragile which underlines certain negative developments.

For instance, owing to a considerable drop in cotton production, the agricultural sector is likely to shrink.

Additionally, with the surge of the third Covid wave, there is a steep fall in trade, transport and LSM activities coupled with the straining nature of the service sector owing to restricted mobility.

Burgeoning trade deficit, reduced public expenditure, faltering remittances and political instability with respect to economic and trade policies have created impediments on the external side.

Cumulatively, as the qualitative economic recovery appears promising, what is required for economy to finally step on the trajectory of sustainable recovery is robust policy support from technocrats and officials.

Most importantly, as the IMF pitches for the restart of the adjustment plan, a more strategic engagement with the bailout package is the need of the hour.

Hadia Mukhtar
Karachi

Published in Dawn, May 11th, 2021