ISLAMABAD-The business activities in Pakistan has started showing signs of recovery as Large Scale Manufacturing (LSM) grew by 20.5 per cent on month on month basis over April 2020.
According to monthly economic updates issued by finance division, year on year growth of LSM decreased by 24.8 per cent in May 2020 as compared to same month a year ago.
However the average growth of LSM during July-May FY 2020 plunged by 10.3 per cent. During July-June FY 2020, total cement dispatches in the country edged up by 1.98 per cent to 47.81MT (46.88 MT last year).
Domestic dispatches decreased by 0.94 per cent to 39.96 Mt in July-June FY 2020 (40.34 MT last year). The cement exports were up by 19.8 per cent to 7.84 MT (6.54 MT last year).
Similarly textile sector, being labour intensive, is highly exposed to COVID-19 thus severely affected by spread of pandemic.
During July-May FY 2020 growth of Textile, Food Beverages and Tobacco and Automobile recorded at -10.6 per cent, -3.7 per cent and -44.8 per cent respectively. Nevertheless, fertilizers, paper and board and rubber products grew by 5.6 per cent, 2.1 per cent and 2.8 per cent respectively.
Government has announced a special package for construction sector that includes amnesty scheme, tax exemptions and Rs30 billion subsidy for Naya Pakistan Housing Scheme.
Banks have been asked to set aside 5 per cent of their portfolios for house financing which comes to about Rs330 billion.
The Economic Coordination Committee (ECC) has approved Rs 50.7 billion package to provide indirect cash flow support to SMEs.
The State Bank of Pakistan (SBP) has curtailed the mark-up rate on Temporary Economic Refinance Facility (TERF) to 5 per cent from the existing 7 per cent and on Long Term Financing Facility (LTFF) for non-textile sector to 5 per cent from 6 per cent. Borrowing has been further eased by SBP by bringing Interest rate to 7 per cent.