Manufacturing, services report negative growth while agriculture thrives

ISLAMABAD: Due to the adverse impact of the Covid-19 pandemic, manufacturing and service sector have reported a negative growth of -5.6 percent and -0.6 percent during the fiscal year 2019-20 compared to a growth of -0.7 percent and 3.8% respectively in the preceding year whereas agriculture reported a growth of 2.7% compared to just 0.6% in the previous year. 

Despite improved energy supply and better security situation in the country, a constant increase in cost of energy and cost of working capital due to twofold increase in interest rate since May 2018 had an adverse impact on the cost of production. 

On the other hand, falling tourism revenues, lower mobility in the transport sector, lock-down inflicted complete cessation of trading activities, closure of education, event management and community services, and major burden on the financial sector because of falling interest rates and business financing have contributed to the shrinking of the service sector as a whole.

However, despite the overall decrease some services like healthcare, online digital content and product delivery have experienced an increasing trend as such services find themselves more relevant in the Covid-19 economic landscape. 

Agriculture showed mixed patterns in growth of its components as its overall growth marginally improved to 2.7 percent in 2019-20 compared to 0.6 percent last year. 

Within agriculture the crop sector registered a positive growth of 3 percent this year. Important crops depicted 2.9 percent growth due to an increase in production of wheat, rice and maize. 

Cotton production succumbed to unfavorable weather, low water availability, and pest attacks, contracting by 6.9 percent compared to last year’s output which in turn undermined the overall crop sector performance in 2019-20.