Pakistan Freight Transport Report 2016
BMI View: The freight industry in Pakistan is forecast to grow moderately over the medium term as trade growth is increasing and investment is being put into freight infrastructure.
Weaker demand for commodities and lower oil prices have impacted the economy in Pakistan over the last year and also subdued freight transport growth.
Nevertheless, reform programmes enhancing growth in private consumption are improving GDP growth, and thus also benefiting road and air freight.
The country's efforts to diversify trade away from its current core trade partners could also enhance the rail and road freight sectors over the medium term.
Pakistan's manufacturing growth momentum has picked up in recent months despite the ongoing contraction in exports.
The Index of Large-Scale Manufacturers posted a growth rate of 5.6% y-o-y in June 2015 on a three-month moving average basis, marking a strong pick-up towards the end of fiscal year 2014/15 (July-June), supporting our view for a slight acceleration in growth in 2016 to 4.3%.
While manufacturing represents just 14.0% of GDP according to the GDP by output statistics, this figure understates the importance of the sector owing to the fact that GDP includes several service sector components that leverage from the manufacturing sector.
As such, a healthy manufacturing sector is crucial to the overall state of the economy and its freight volumes.
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