LSM grows by 20.5% in May

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ISLAMABAD, Jul 28 (APP):The business activities in Pakistan has started showing signs of recovery as Large Scale Manufacturing (LSM) grew by 20.5 percent 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 percent 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 percent.
During July-June FY 2020, total cement dispatches in the country edged up by 1.98 percent to 47.81Mt (46.88 Mt last year). Domestic dispatches decreased by 0.94 percent to 39.96 Mt in July-June FY 2020 (40.34 Mt last year).
The cement exports were up by 19.8 percent to 7.84 Mt (6.54 Mt last year).
Similarly textile sector, being labor 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%, -3.7% and -44.8% respectively. Nevertheless, fertilizers, paper and board and rubber products grew by 5.6 percent, 2.1 percent and 2.8%
Government has announced a special package for construction sector that includes amnesty scheme, tax exemptions and Rs 30 billion subsidy for Naya Pakistan Housing Scheme.
Banks have been asked to set aside 5 percent of their portfolios for house financing which comes to about Rs 330 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 percent from the existing 7 percent and on Long Term Financing Facility (LTFF) for non-textile sector to 5 percent from 6 percent.
Borrowing has been further eased by SBP by bringing Interest rate to 7 percent.