Latest news with #HBLPakistanManufacturingPMI
Business Recorder
4 days ago
- Business
- Business Recorder
Pakistan's manufacturing PMI falls amid geopolitical unrest & supply disruptions
KARACHI: The headline HBL Pakistan Manufacturing PMI fell to an 8-month low of 51.1 in May from 51.9 in April, reflecting a notable slowdown in business activity from the series peak in December. Analysts attribute the decline to disruptions caused by the recent geopolitical unrest and raw material shortages linked to road closures. The HBL S&P Manufacturing PMI, serves as a key economic indicator, offering a clearer & timely signal of business conditions compared to traditional GDP data. Unlike GDP, which is published quarterly and often revised, the PMI delivers real-time economic signals, showing a stronger correlation with equity markets. The exclusion of public sector activities partially helps explain why the PMI survey's global output index exhibits a higher correlation with equities. Humaira Qamar, Head of Equities & Research - HBL, commented on the latest report, stating 'The moderation in business activity was driven by a contraction in new orders—the most forward-looking subindex—emanating from geopolitical unrest and logistical disruptions. Export orders declined for a second consecutive month, further dampening business sentiment. While output expanded, it was mainly driven by the completion of existing orders. Despite temporary headwinds, including tariffs & geopolitical unrest, the outlook for the manufacturing sector remains optimistic. The survey indicates strong business confidence in production growth over the next year, fueled by expectations of improving demand.' Humaira mentioned that although interest rates are at their lowest in 3 years, the government's contractionary fiscal stance continues to keep growth prospects in check. Provisional estimates showed GDP growing at a modest 2.7% in FY25, up only slightly from 2.5% last year. This year's Federal budget is set for release on June 10 in close coordination with the IMF, where the authorities are expected to continue strong consolidation efforts, targeting a primary budget surplus of 1.6% of GDP, the third consecutive surplus. According to Humaira, FBR tax revenues are expected to rise 16%, outpacing nominal GDP growth, pointing to the limited scope for tax relief in the upcoming budget. She further stated 'To uphold fiscal discipline & offset potential tax shortfalls, the government will likely bolster non-tax revenues—through higher levies on petroleum products—and tighten development expenditures. However, defense spending may remain insulated from cuts, given the prevailing geopolitical landscape.' Copyright Business Recorder, 2025
Business Recorder
03-05-2025
- Business
- Business Recorder
HBL manufacturing PMI softens to 7-month low
KARACHI: The HBL Pakistan Manufacturing PMI (compiled by S&P Global) eased to 51.9 in April down from 52.7 last month, marking the lowest reading in seven months. The Manufacturing PMI is a vital forward-looking metricfor gauging the overall health of the wider economy. The survey covers various components including New Orders, Output & Employment among others. New orders moderated to the lowest since last September amid falling foreign demand for Pakistani goods. However, it should be pointed out that the reading continues to remain over 50.0, indicating an increase in manufacturing orders over the preceding month. Commenting on the latest PMI release, Humaira Qamar - Head Equities & Research at HBL stated 'Notably, Fresh export orders fell for the first time in the series' history. Employment levels were down for the second consecutive month as companies sought to reduce costs and adjust to lower production needs. While the Output index increased, this was partly driven by the completion of outstanding business. Overall, we believe that the latest PMI dips are early signs of the headwinds to the global economy from the introduction of U.S. tariffs. A US stagflation scenario – a recession accompanied by rising prices - would, impact Pakistan's economy, firstly due to a likely reduction in exports to the US (the country accounts for 18% of Pakistan's exports), and secondly, exports to other markets are likely to suffer as well. This could well prolong the downturn in Pakistan's manufacturing sector. An offset to this could be in the form of a relief from lower energy imports in the event that commodity prices take a downturn. Nevertheless, business confidence regarding the outlook has strengthened further, underpinned by hopes of improving demand conditions along with reductions in electricity and input costs. Indeed, the inflation outlook is favourable, with the pace of cost inflation and the rise in output charges still well below the series average. Strong disinflationary pressures may spur the State Bank Monetary Policy Committee to ease the policy rate at the upcoming MPC meeting on the 5th of May.' Copyright Business Recorder, 2025
Express Tribune
08-03-2025
- Business
- Express Tribune
Analysts predict seventh rate cut amid low inflation
Listen to article Most analysts predict a seventh consecutive rate cut by Pakistan's central bank on Monday, amid the first International Monetary Fund (IMF) review of a $7-billion bailout at the time of the lowest inflation in nearly a decade. The cash-strapped South Asian nation could unlock a further tranche of funding if the IMF review is approved before the budget is unveiled in June, as it pursues economic reforms mandated by the IMF programme. The central bank's easing cycle, one of the most aggressive among emerging markets, follows a series of rate cuts totalling 1,000 basis points (bps) over six months that took the key rate to 12%, down from a record high of 22% in June. The latest cut, of 100 bps, was in January. February inflation stood at a near-decade low of 1.5%, largely due to a high base a year ago. A Reuters survey of 14 analysts suggests that the central bank may further reduce rates, with a median forecast for a cut of 50 bps. Of the 10 analysts expecting a rate cut, three estimated its size at 100 bps, one at 75 bps, and six at 50 bps. The rest saw no change. Most analysts expecting a rate cut believe the central bank will stop when rates hit 10.5% to 11%, due to a potential rise in inflation. They anticipate a moderate rise from March to May. Inflation will "bottom out" in the year's first quarter before gradually rising, said Ahmad Mobeen, senior economist of S&P Global, who anticipates average inflation of 6.1% for 2025. Despite the "sharp drop" in the Consumer Price Index (CPI), he said urban core inflation, indicative of price pressures, remained high, at 7.8%. "The S&P Global HBL Pakistan Manufacturing PMI also indicates rising input costs, pushing manufacturers to hike prices in February 2025 at the fastest pace since October 2024," he added. At its last policy meeting, the central bank kept its forecast of full-year GDP growth at 2.5% to 3.5%, and predicted faster growth would help boost foreign exchange reserves that had been lacklustre. "While GDP posted 0.9% growth in the first quarter of fiscal year 2025, large-scale manufacturing remains in negative territory, and production has yet to gain momentum," said Sana Tawfik, head of research at Arif Habib Limited.
