Pakistan Purchasing Managers Index (PMI) Points to Growth in Manufacturing
Pakistan Purchasing Managers Index (PMI), jointly launched by Habib Bank (HBL) and S&P Global, is showing sustained growth in manufacturing for the last several months. It has been consistently above 50, indicating expansion. This indicator disagrees with contraction reported by Pakistan Bureau and Statistics (PBS) Large Scale Manufacturing (LSM) indicator. What accounts for this discrepancy? Is it because the LSM tracks only a subset of industries tracked by PMI? Is there a difference in methodology?
![]() |
Pakistan PMI Trend. Source: S&P Global |
Here's one plausible explanation offered by analyst Humaira Qamar at HBL: "As per the Pakistan Bureau of Statistics, Large scale manufacturing (LSM) contracted 1.8% in the latter half of 2024. However, excluding the hefty decline in the low-weight furniture segment, LSM trended positively. Our PMI release suggests that the recovery has extended into 2025, with demand-side conditions taking cue from a sharp reduction in the policy rate".
Another possible explanation for the discrepancy between PMI and LSM can be seen in the fact that power generation for the grid, a key component of the LSM indicator, is in constant and substantial decline. However, the power generation data tracked by PBS excludes rapidly rising solar electricity production by consumers, including industrial consumers in the country. Pakistan's grid-connected electricity production and electricity consumption are given as around 110 TWh for 2024, but appear to be declining compared to 2023, which contradicts expectations of increasing demand, but could be a sign of the massive expansion of solar energy, according to an article in PV magazine titled ‘The Solar Blitz’: How crisis-ridden Pakistan is leading the world on the ‘Solar March’. Based on rather imprecise Chinese solar panel export figures and extensive satellite imagery, Bloomberg energy analyst Jenny Chase has concluded that rapid solar expansion in Pakistan is real.
In August 2024, Chase tweeted as follows: "Pakistan's energy regulator, NEPRA, notes that power consumption is down 9.1% year on year in 2023. NEPRA attributes the drop mainly to high power prices cutting economic activity and making residential consumers curb consumption, with rooftop solar only a third factor. But NEPRA doesn't know how much solar the country has, either. We think it has about 12.7GW of solar already (compared with 50GW on-grid power capacity) and will add 10-15GW of solar in 2024".
In addition to the decline in grid power generation, the reported drag in LSM growth is primarily due to a few low-weight sub-sectors, which have more than offset positive momentum in key sub-sectors such as textiles, pharmaceuticals, automobiles, and POL (petroleum, oils and lubricants), according to the State Bank of Pakistan, as reported by the Express Tribune.
![]() |
Pakistan Manufacturing Orders, Output and Employment. Source: S&P Global |
High-frequency data like monthly PMI help in gauging real time economic activity in terms of orders, output and employment in the manufacturing sector. Here's an excerpt of the HBL/S&P Global PMI report for February 2025 published in March:
Manufacturers in Pakistan also responded to strengthened operating conditions by raising their staffing levels in February, marking the second increase in as many months. Several firms commented that they required additional capacity in response to higher production requirements, while others mentioned longer operating hours. Increased capacity allowed firms to stay on top of outstanding business in February, as indicated by a sustained and steeper fall in backlogs of work. The latest depletion was the most pronounced in five months. Finally, companies expressed confidence in the future path for output during February, with optimism remaining marked overall. This optimism was underpinned by hopes for further new product launches and improvements in product quality, alongside expectations of softer price pressures.
Related Links:
2021: A Banner Year For Tech Startups in Pakistan
Is Pakistan Ready For AI Revolution?
Digital Pakistan 2022: Broadband Penetration Soars to 90% of 15+ Population
STEM Enrollment in Pakistan Exceeds One Million
Digital Public Infrastructure in Pakistan
Solar Power Boom in Pakistan
Pakistan at 75
Growing Presence of Pakistani Women in Science and Technology
Riaz Haq's Youtube Channel
Comments
https://news.bitcoin.com/report-pakistan-to-unveil-crypto-friendly-electricity-tariffs-to-lure-miners/
Pakistan is reportedly planning to develop a specialized electricity tariff regime for crypto mining and blockchain-based data centers.
In a significant move, Pakistan is reportedly developing specialized electricity tariffs to attract crypto mining and blockchain-based data centers, further loosening its past stance on cryptocurrencies. This initiative aims to capitalize on the country’s surplus power capacity, transforming a potential liability into a valuable asset while fostering growth in the burgeoning digital asset industry.
According to a Dawn report citing sources in Pakistan’s power ministry, extensive consultations are underway with stakeholders to formulate an attractive electricity tariff structure for emerging industries. This development follows a series of high-level discussions, including a recent meeting between Power Minister Awais Leghari and Bilal Bin Saqib, CEO of the newly formed Pakistan Crypto Council (PCC).
As reported by Bitcoin.com News, the PCC was launched with the mandate of integrating blockchain and digital assets into the financial system. The PCC’s inaugural meeting on March 21, presided over by Finance Minister Muhammad Aurangzeb, further solidified the government’s interest in exploring the crypto space.
At this meeting, Saqib presented a vision for utilizing Pakistan’s surplus electricity for bitcoin mining, drawing significant attention from attendees, including State Bank Governor Jameel Ahmad and the Securities and Exchange Commission of Pakistan Chairman Akif Saeed.
In remarks commending the PCC’s first meeting, the Pakistani Finance Minister said, “This is the beginning of a new digital chapter for our economy. We are committed to building a transparent, future-ready financial ecosystem that attracts investment, empowers our youth, and puts Pakistan on the global map as a leader in emerging technologies.”
The PCC-sponsored initiative highlights the shift in Pakistan’s approach to cryptocurrencies. Previously, Pakistan regulators, including the State Bank of Pakistan (SBP), warned against the use of cryptocurrencies, citing concerns about money laundering and financial instability. In 2023, the SBP and the Information Ministry considered banning cryptocurrencies altogether.
The government has since recognized the potential of blockchain technology and digital assets, leading to its latest attempt to attract miners.
https://www.reuters.com/world/asia-pacific/pakistan-cut-power-tariff-by-741-rupees-per-unit-home-consumers-2025-04-03/
ISLAMABAD, April 3 (Reuters) - Pakistan will cut power prices for domestic and industrial users, Prime Minister Shehbaz Sharif said on Thursday, in a sign of the economy's recovery from the brink of default.
The International Monetary Fund stepped in to stabilise the Asian country's finances with a standby arrangement in 2023 and then a $7 billion bailout last year.
----------------------
Lower power prices will be a relief to Pakistanis after several increases in the past couple of years.
Pakistan's $350 billion economy has been struggling since inflation rose to record high of 38.50% in May 2023, with growth turning negative, reserves shrinking to barely a couple of weeks of controlled imports, and interest rates jumping to 22%.
"We have successfully brought the inflation down to single digit," Sharif said, adding that the nearly 10-percentage-point reduction in the country's main interest rate in the last year would help businesses grow.
The tariff will be cut by an average 7.41 rupees ($0.0264) per kilowatt-hour to 34.47 rupees for domestic users, and by an average 7.59 rupees per kilowatt-hour to 40.60 rupees for industrial users, Sharif said.
@ArifHabibLtd
Textile exports increased by 10% YoY to USD 1.4bn in Mar'25
Textile exports increased by 10% YoY | 1% MoM to USD 1.4bn in Mar'25. For 9MFY25, exports rose by 9.4% compared to the previous year, reaching USD 13.6bn.
https://x.com/ArifHabibLtd/status/1912831835828109746
https://www.thenews.com.pk/print/1307604-pakistan-s-factory-pmi-dips-in-early-sign-of-global-tariff-headwinds
KARACHI: Pakistan’s manufacturing sector growth cooled to its weakest pace in seven months in April, with the HBL Pakistan Manufacturing Purchasing Managers’ Index (PMI) slipping to 51.9 from 52.7 in March, HBL said in a press release.
The decline reflects mounting global trade pressures, notably the fallout from US President Donald Trump’s trade tariffs, said Head of Equities & Research at HBL Humaira Qamar. New orders slowed, with export orders dropping sharply. Employment also contracted for the second consecutive month as manufacturers trimmed costs.
Qamar warned that any stagflation in the US would hit Pakistan’s exports hard, particularly as the US accounts for 18 per cent of the country’s total exports. However, she noted that easing commodity prices could offer some respite.
Despite the deceleration, the PMI remained above the neutral 50 mark, signalling ongoing expansion against a backdrop of moderating inflation. Qamar said deflationary pressures support the case for an interest rate cut at the upcoming monetary policy meeting on Monday. However, a Reuters poll indicated that the State Bank of Pakistan is expected to keep rates unchanged at 12 per cent, following its surprise pause at the last meeting due to geopolitical tensions and inflation risks.
Pakistan’s annual inflation rate dropped to 0.3 per cent in April, well below the Ministry of Finance’s forecast of 1.5-2 per cent. The central bank projects average inflation of 5.5 to 7.5 per cent for the fiscal year ending in June.The PMI, jointly launched by HBL and S&P Global in February, tracks manufacturing sector trends in Pakistan.
https://profit.pakistantoday.com.pk/2025/05/10/pakistans-electricity-sector-faces-challenges-despite-growth-in-renewables-says-2025-review/
One of the most notable developments in FY24 was the surge in imports of solar photovoltaic (PV) panels from China, which contributed to rapid growth in rooftop solar installations across the country. By March 2025, Pakistan had installed 4.9 GW of net-metered solar capacity. However, the review notes that a considerable number of behind-the-meter solar installations have not been documented, which could mean the actual capacity is even higher.
Pakistan’s total installed power generation capacity rose to 46.2 GW during FY24, following the addition of three new utility-scale solar plants. This brought the share of utility-scale renewables in the country’s generation mix from 6% to 7%. Despite these additions, the report highlights that the overall contribution of renewable energy sources—wind, solar, and bagasse—remained stagnant at 5%, well below the targeted 30% share by 2030.
-----------
Pakistan Electricity Review 2025 highlights progress in solar installations but flags persistent issues like transmission bottlenecks and rising capacity payments.
The Pakistan Electricity Review 2025, launched by Renewables First, a think tank based in Islamabad, provides a detailed examination of Pakistan’s power sector during the fiscal year 2024 (FY24). The report identifies significant strides in the sector, particularly in renewable energy, but also points out several continuing challenges that hinder further progress.
-----
Pakistan’s total installed power generation capacity rose to 46.2 GW during FY24, following the addition of three new utility-scale solar plants. This brought the share of utility-scale renewables in the country’s generation mix from 6% to 7%. Despite these additions, the report highlights that the overall contribution of renewable energy sources—wind, solar, and bagasse—remained stagnant at 5%, well below the targeted 30% share by 2030.
Transmission bottlenecks and overloaded grid infrastructure were identified as key obstacles to the efficient transfer of power, particularly from the south to the energy-demanding north. These limitations forced the system operator to reduce dispatch from lower-cost plants, relying more on expensive RLNG-based generation, which led to a sharp increase in energy purchase costs. The total energy purchase cost surged to PKR 1.3 trillion, with RLNG generation accounting for PKR 568 billion, nearly 51% of the total.
The report also noted a decline in electricity sales for the second consecutive year, with overall sales falling by 3%. The industrial sector, in particular, saw an 11% year-on-year decrease in consumption, reflecting economic challenges and a shift towards more cost-competitive energy sources.
On the financial front, capacity payments rose to PKR 1.9 trillion, a 46% increase compared to FY23. This spike was largely driven by the commissioning of new coal and RLNG power plants, which carry high fixed costs. However, when these plants operate below optimal capacity, the cost is passed on to consumers, further straining the sector’s financial health. Despite these challenges, a reduction in electricity generation led to a modest 7% reduction in energy purchase prices.
The report also highlighted the growing issue of circular debt, which rose to PKR 2.4 trillion by the end of FY24, an increase of 3.6% over the previous year. This ongoing debt accumulation underscores the financial pressures faced by the sector.
The Pakistan Electricity Review 2025 serves as both a snapshot of the progress made in the energy sector and a stark reminder of the structural issues that continue to impede its growth. It calls for continued policy efforts to address these challenges as Pakistan strives to meet its renewable energy goals and ensure a more sustainable and efficient power sector.
@ArifHabibLtd
Large Scale Manufacturing Industries (LSMI) output witnessed an increase of 1.79% YoY during Mar’25 while on MoM basis, it decreased by 4.6%. During 9MFY25, LSM output decreased by 1.5% YoY.
https://x.com/ArifHabibLtd/status/1923034467699921273
@akdsecurities
𝐏𝐚𝐤𝐢𝐬𝐭𝐚𝐧 𝐣𝐨𝐢𝐧𝐬 𝐭𝐡𝐞 𝐔𝐒$𝟒𝟎𝟎 𝐛𝐢𝐥𝐥𝐢𝐨𝐧 𝐆𝐃𝐏 𝐥𝐞𝐚𝐠𝐮𝐞
Pakistan's 2025 GDP estimated at $411 billion
https://x.com/akdsecurities/status/1924774821826543723
-------------------
AKD Securities
@akdsecurities
𝐏𝐚𝐤𝐢𝐬𝐭𝐚𝐧’𝐬 𝐩𝐞𝐫 𝐜𝐚𝐩𝐢𝐭𝐚 𝐢𝐧𝐜𝐨𝐦𝐞 𝐡𝐢𝐭𝐬 𝐚 𝐡𝐢𝐬𝐭𝐨𝐫𝐢𝐜 𝐡𝐢𝐠𝐡 𝐨𝐟 𝐔𝐒$𝟏,𝟖𝟐𝟒
https://x.com/akdsecurities/status/1924798326920065387
@sohailkarachi
Pakistan’s Revenues Nearly Double in 2 Years
In a major turnaround, Pakistan’s government total revenues have jumped from Rs 9.6 trillion to almost Rs 18 trillion in just two years.
This increase — driven by better tax collection, new taxes, and support from the central bank — has raised revenue-to-GDP from 11.4% to 15.8%.
With this strong performance under IMF reforms, the upcoming FY26 budget may target lower tax growth, showing signs of easing pressure on the economy.
https://x.com/sohailkarachi/status/1925455321885020282