Economic stabilization has been achieved: inflation is nosediving, interest rates have been cut in half, and the currency remains calm, supported by a primary fiscal surplus and a current account in surplus as well. However, economic growth revival is not in sight, with large-scale manufacturing (LSM) performance remaining extremely poor.

Eight out of the last ten quarters have seen contraction in LSM. In the current fiscal year, total industrial output is still below what it was in 2019.

Eleven of the twenty-two LSM sub-indices are below the levels seen in 2015. According to BR Research calculations, on a seasonally adjusted 12-month rolling basis, juices, leather goods, and motor tyres are all at a 105-month low, cement is at an 82-month low, and iron and steel production is at an eight-year low. And the list goes on.

This is not due to base effects. There is no temporary shock at play. The depth and breadth of the decline are alarming. It appears that the downturn in certain sectors may be permanent, with little chance of recovery in the near future. The question is: why is the economy not reviving?

There are both supply- and demand-side problems. On the........

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