Pakistani one thousand rupee banknotes and coins in Pakistan. | Photographer: Asim Hafeez | Bloomberg
Pakistani one thousand rupee banknotes and coins in Pakistan. | Photographer: Asim Hafeez | Bloomberg
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Islamabad: Pakistan is showing signs of business activity picking up at a faster clip, as worries about new coronavirus infections fade in an economy that contracted for the first time in seven decades.

Evidence of momentum returning can be seen from growing cement-to-fuel sales and demand for home appliances to cars. That’s happening even as Pakistan added fewer than 2,900 cases last week compared with almost 35,000 cases in a week in June, and 96% of the total 300,000 infected have fully recovered.

“It has surprised everybody,” said Muzzammil Aslam, chief executive officer at Tangent Capital Advisors Pvt., who expects economic expansion at 4%-5% in the year started July, higher than the government’s 2.1% target. “The growth is led by an aggregate demand push.”

Here’s a look at sectors where activity is ticking and why:

Construction Boom

Cement sales rose 38% from a year ago to 4.8 million tons in July, and near a record level seen in October. A government program to give amnesty to tax evaders, provided they fund construction projects, is expected to fuel activity — and demand for cement — as work resumes after the lockdown.

“We expect dispatches to continue their rising run moving forward because of tax measures,” said Saad Khan, research head at IGI Securities Ltd. “Substantial decline in interest rates and mandatory targets given for banks to increase housing and construction financing to at least 5% of private sector credit” will also help, he said.

Cement sales eased to 3.5 million tons in August, mainly because of torrential rains across the country.

Fuel Sales

Gasoline sales in June rose to a record high as people return to work after lockdown measures eased in May, according to A. A. H. Soomro, managing director at KASB Securities Pvt. Sales have stayed elevated in July and August.

Fuel for power generation has increased as well. Fuel oil sales rose in June to the highest in a year while LNG spot cargo purchase resumed in June after a six-month hiatus.

Car Sales

Local car deliveries have recovered to about 10,000 units after four months as the end of lockdown ushered in new demand.

Kia Motors Corp.’s local unit is planning to add a second shift at its factory in Karachi from January.

Manufacturing

Manufacturing output improved for a second consecutive month in June. The overall recovery in large-scale manufacturing will likely be stronger in the October-to-December quarter with worldwide demand picking up, said Khaqan Najeeb, a former adviser to Pakistan’s finance ministry. Home appliances are also seeing “robust demand,” said Haroon Ahmad Khan, chief executive officer at Waves Singer Pakistan Ltd. – Bloomberg


Also read: Asim Bajwa’s dirty money is RAW saazish in Imran Khan’s Pakistan


 

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14 Comments Share Your Views

14 COMMENTS

  1. Well worlds three credit rating agencies sees Pakistans economy as “stable”. Which is a B rating, and is taking off with exports improving on monthly basis, imports stabilized and CAD improving monthly. Nothing is “approximate” based on real time numbers. Pakistan is on the recovery course much faster than expected. It will surprise its detractors, just like it did on coronavirus control.

  2. Hell lot of hoaxes , their debt is increasing very fast , china has already taken away gwadar port and the growth rate of Pakistan is too low , everything is cooked up in this story . Pakistan will always remain a poor country till it finishes off the religious society

  3. What else one can expect from a Indian jealousy negativity and inferiority complex from Pakistanis and Muslims in general,Its a congenital disease unfortunately most of Indian are suffering from,wether it concern them or not their worldview any religious ,political discourse is only and only Islam and Muslims centric I guess they can’t digest meal until talk about Muslims.

    • Jealousy and inferiority complex about Pakistan! What! Are you kidding me!! India’s UP which is the among the bottom two states has better conditions and economy than Pakistan. There is no jealousy my friend, it’s just that you fall prey to propagandist news articles and not to facts.

      • Perhaps you fall prey to your highly propagandist news as well and fail to see unfortunate souls eating dead dogs on the street. the reality is a bit different my friend.

  4. Cooked up story, their economy is in doldrums and what miracle you can expect. Nobody claims their economy is doing well. How can you expect even approximate figures, unofficially it must have crossed a million.

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