KARACHI, Oct 26: Shipbreaking
industry showed hyper activity within first three months of the new government.
A report issued by the State Bank
showed that credit off-take by the shipbreaking industry shot up between July
and September.
Overall manufacturing sector
showed no signs of improvement. Instead, a significant decline was visible in
their credit off-take from the banking industry during the quarter.
According to the State Bank,
credit off-take by ship-breaking industry rose by Rs3.5 billion to Rs18.245bn
till end September, 2013.
However, credit off-take by the
entire manufacturing sector witnessed a sharp decline of Rs26bn to Rs1422bn,
reflecting poor state of economy and disappointing manufacturing sector growth.
Since the inception of the new
government, it was widely expected that Prime Minister Mian Nawaz Sharif would
wake up sluggish economic activities with some new ideas and new economic
policies, but so far no strategy has been introduced at the highest level.
It was not known to bankers why
liquidity suddenly started floating towards the shipbreaking industry.
However, informed sources said that
the new government is interested in seeing the shipbreaking industry
flourishing like it had been in the past.
The bankers had no reasons for
other sectors to be ignored by the banking industry.
The most important sectors, like
textile, have yet not shown willingness to improve their performance.
According to the State Bank,
textile sector which is largest consumer of banking loans (now mostly for
working capital) added only Rs328 million in three months in their total loans
worth Rs515.230bn.
The textile industry has been
crying over higher interest rate when the State Bank increased the interest
rate by 50 basis points to 9.5pc last month.
Since the cost of production has
risen significantly due to massive devaluation of local currency, exports could
see a dent during the current fiscal year. Textile exporters use up to 30pc
imported constituents for their exportable products.
Another important industry of
footwear noted a decline in the credit off-take by Rs544m during this period.
However, for the first time
during the last 100 days since beginning of new fiscal year, private sector
borrowed Rs14bn from the banking sector.
According to another SBP report,
private sector’s net borrowings in the last fiscal year were minus Rs19bn which
means private sector kept retiring debts in FY-13.
Source:
Dawn. 26 October 2013
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