*1/n Pakistan’s Economy Shows Momentum as Virus Cases Taper Off*

By Faseeh Mangi

_Covid-19 worries dim as cases drop, 96% patients recovered_
_Cement sales rise close to record, gasoline at all-time high_

2/n Pakistan is showing signs of business activity picking up at a faster clip, as worries about new coronavirus infections fade in an economy that contracted for the first time in seven decades.

11/n Manufacturing
output improved for a second consecutive month in June. The overall recovery in large-scale manufacturing will likely be stronger in the October-to-December quarter with worldwide demand picking up, said Khaqan Najeeb, a former adviser to finance ministry.

12/12 Home appliances are also seeing “robust demand,” said Haroon Ahmad Khan, chief executive officer at Waves Singer Pakistan Ltd.

3/n Evidence of momentum returning can be seen from growing cement-to-fuel sales and demand for home appliances to cars. That’s happening even as Pakistan added fewer than 2.9k cases last week compared with 35k cases in a week in June, and 96% of the total 300k infected recovered

6/n A government program to give amnesty to tax evaders, provided they fund construction projects, is expected to fuel activity -- and demand for cement -- as work resumes after the lockdown.

7/n “We expect dispatches to continue their rising run because of tax measures,” said Saad Khan, at IGI Securities Ltd. “Substantial decline in interest rates & mandatory targets given for banks to increase housing & construction financing to at least 5% of private sector credit”

8/n Cement sales eased to 3.5 million tons in August, mainly because of torrential rains across the country.

Fuel Sales

Gasoline sales in June rose to a record high as people return to work after lockdown measures eased in May, according to A. A. H.

9/n Soomro, managing director at KASB Securities Pvt. Sales have stayed elevated in July and August.

Fuel for power generation has increased as well. Fuel oil sales rose in June to the highest in a year while LNG spot cargo purchase resumed in June after a six-month hiatus.

4/n
“It has surprised everybody,” said Muzzammil Aslam, chief executive officer at Tangent Capital Advisors Pvt., who expects economic expansion at 4%-5% in the year started July, higher than the government’s 2.1% target. “The growth is led by an aggregate demand push.”

5/n Here’s a look at sectors where activity is ticking and why:

Construction Boom

Cement sales rose 38% from a year ago to 4.8 million tons in July, and near a record level seen in October.