Govt claims stability amid contraction in Large-Scale Manufacturing output

Presenting a mixed bag of economic stabilisation apparently at the cost of manufacturing stagnation, the government on Thursday hinted at further cuts in the interest rate amid rising inflation estimates. In its monthly review, the Ministry of Finance (MoF) also confirmed struggling tax revenues to meet budget targets, yet overwhelming growth in non-tax revenues, particularly earned through peak interest rate-based State Bank profit and highest-ever petroleum levy driving primary budget surplus and tepid fiscal deficit, at 3pc and 2.2pc of GDP, respectively. “Large-Scale Manufacturing (LSM) recovery remains elusive,” said the MoF in its Monthly Economic Update and Outlook for April, adding that LSM continued to be under pressure, “with output declining by 1.9pc during July-February FY25, compared to a 0.4pc contraction last year. In February, LSM registered a month-on-month (MoM) decline of 5.9pc and a year-on-year (YoY) decrease of 3.5pc”.