In the first half of the fiscal year 2022, manufacturing, exports showed an upward trend, the State Bank
The State Bank has released the Economic Review Report for the financial year 2022.
In the report, the State Bank said that in the context of the first half of FY22, there was a broad-based increase in large-scale manufacturing (LSM), with exports showing an upward trend.
According to the report, FBR taxes increased and high production was recorded in Kharif crops, but as the year went by, rising inflation and a current account deficit due to the highest global commodity prices in many years became a challenge. This pressure necessitated monetary tightening among other regulatory measures to moderate demand.
According to an analysis prepared on the basis of July–December FY22 data, the report states that the government’s vigorous vaccination campaign coupled with improved conditions regarding COVID has largely paved the way for uninterrupted economic activities. Besides, fiscal measures including tax cuts on certain sectors and higher non-interest current expenditure, along with the expansion of federal and provincial development expenditure, supported economic growth.
There was a broad-based growth in LSM in the first half of FY22, with 16 out of 22 LSM sectors recording productivity growth. However, the impact of the 9.7% increase in the first quarter of FY22 was a modest 5.5% in the second quarter. Due to the percentage growth, it disappeared.
In the agriculture sector, the reason for the good Kharif production was the record crops of rice and sugarcane crops. Cotton production also increased compared to the previous year due to favorable weather conditions. I, i.e., higher unit prices and export volumes, played a role in the export growth.
Non-interest spending increased by about 20% in the first half due to increased social security and welfare spending, while federal government development projects increased by about 20%, but decreased in the second quarter to control the fiscal deficit.
