CORPORATE WINDOW: The mirage of good news

Here is good news! Corporate earnings in the first nine months of this fiscal year remained robust despite flat economic growth, according to a recent Dawn report based on data compiled by Arif Habib Ltd. Combined earnings of the representative firms of corporate Pakistan rose 8.8 per cent year-on-year to Rs877.6 billion during July 2022-March 2023. The annual increase in after-tax profit in January-March 2023 was even higher — 12.7pc. While this development is reassuring and reflects the resilience of Pakistan’s corporate sector, policymakers in the country and the private sector need to work harder to sustain the trend. That’s not going to be a walk in the park. April-June 2023 corporate earnings may not show as promising growth as in the last quarter, reflecting the effect of the heightened political/constitutional crisis. And the performance of the corporate sector in the next fiscal year, beginning in July, depends mostly on the environment in which general elections are held and who comes into power. Industry performance in the next fiscal year depends mostly on the environment in which general elections are held and who comes into power It also depends on what kind of FY24 budget the incumbent PDM-led federal coalition government presents in June — and what happens to the provincial budgets of Punjab and Khyber Pakhtunkhwa. The caretakers in these two provinces have outlived their Constitutional tenures.