Pakistan’s Economy Shows Momentum as Virus Cases Taper Off - Bloomberg

[ASKardar]

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.

Solid Level

Pakistan's July cement sales rise close to October all-time high

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.

Output Grows

Pakistan's manufacturing recovers for second straight month

https://www.bloomberg.com/news/arti...onomy-shows-momentum-as-virus-cases-taper-off

 

[Rafi]

Good green shoots of recovery.

 

[Flash_Ninja]

Good government policies and management are to thank for this, even though certain outlets desperately try to paint it as a holy miracle or lie.

 

[Meengla]

It was a wise policy to allow legal escape to corrupt so long as they would pay back via fines..as by the Baharia Town Karachi..or by forcing the corrupt to invest in the country.. filling the jails with them wouldn't have done much good...
So while work to improve stopping corruption but never lose sight of the larger picture... which is stimulation of the economic activity...

 

[ziaulislam]

hope critical projects are completed on time
these includes
1. dams
2. ML 1
3. special economic zones

also work is still needed in solving power sector and gas problem.

without fixing the structural problems Pakistan wont pick up growth

this is the opportunity with afghan peace and post covid recovery advantage..

 

[ghazi52]

Pakistan’s economy shows momentum: Bloomberg

In a report, the economic journal said that Pakistan was showing signs of business activity picking up at a faster clip, as worries about new COVID-19 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.”

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.
IGI Securities research head Saad Khan said, “We expect dispatches to continue their rising run moving forward because of tax measures.”

“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”
Pakistan’s July cement sales rise close to October all-time high. 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. 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, said the economic journal.

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.