Local mobile phone production drops 62% MoM in July after GST hike

The Pakistan Telecommunication Authority (PTA) has reported a decline in local mobile phone manufacturing, with production and assembly dropping to 1.61 million units in July 2024. This represents a 20% year-on-year decrease and a dramatic 62% month-on-month decline.

The sharp drop in July is attributed to a surge in pre-buying activities in June 2024, following the announcement of an 18% GST on mobile phones in the FY2025 budget. Consumers rushed to purchase mobile phones before the tax took effect, leading to reduced manufacturing activity in July. 

Despite the dip, average monthly sales for June and July combined were 2.9 million units, higher than the 2.6 million units average observed from January to May 2024.

In the first seven months of 2024, a total of 18.95 million mobile phones were manufactured and assembled locally, marking a 2.3-fold increase compared to the same period last year. 

This growth is largely attributed to import restrictions imposed last year, which have boosted local production. Year-on-year growth for this period stands at 27%, driven by factors such as economic recovery, higher taxes on imported phones, and an increasing population.