INTERNATIONAL DESK: Pakistan’s job market has started shrinking amid economic slowdown, as some sectors have reported layoffs while for new comers finding jobs can become a tough task in the short to medium term.
“Textile and technology sectors have reported job cuts amid economic slowdown,” Fahad Rauf, Head of Research at Ismail Iqbal Securities, said last week.
“Some Pakistani exporters have reported cancellation of export orders (by international buyers) in the backdrop global recession fears.”
The rate of employment has improved and the rate of unemployment has decreased in the past three years (from 2018- 19 to 2020-21). The rates, however, still stand below the required levels due to slower economic growth compared to the 6-7% economic expansion required to accommodate all new job-seekers in the country.
The central bank has anticipated in its latest monetary policy statement unveiled on July 7, 2022 that Pakistan’s economy will slow down to 3-4% in the fiscal year that started on July 1 compared to 6% growth in the past two consecutive fiscal years (FY21 and FY22).
“The rate of employment has contracted due to slowdown in the economy,” said BMA Capital Executive Director Saad Hashemy.
The job market has started shrinking due to a sharp increase in global commodity prices amid the Russia-Ukraine war as Pakistan heavily relies on imports to fuel the economy.
He, however, anticipated that the fast drop in global commodity prices in recent days would help the resilient domestic economy to recover and reopen opportunities for the new comers, who would be able to find suitable jobs.
The crude oil (West Texas Intermediate) price fell to $95 per barrel in the international market on Tuesday compared to around $120 per barrel about a month ago.
“The labour force increased from 65.5 million in 2017-18 to 71.76 million in 2020-21 and the number of employed people increased from 61.71 million to 67.25 million during the same period,” said the Economic Survey 2021-22 unveiled about a month ago.
“The unemployment rate slightly decreased from 6.9% in 2018-19 to 6.3% in 2020-21. This shows that 4.51 million people from the labour force could not get job in FY2021.”
Being a major contributor to the gross domestic product (GDP), the agriculture sector plays an important role in development of the economy.
According to the Labour Force Survey 2020-21, the share of employment in the agriculture sector decreased from 39.2% in 2018-19 to 37.4% in 2020-21.
This sector is the key source of raw material supply to different sectors of the economy, especially the industrial sector.
A significant share in employment from the agriculture sector has shifted to the industry and services sector due to technological transformation.
The services sector is the fastest growing sector of the economy and its share in employment was 37.2% in 2020-21.
Construction and manufacturing sectors are considered as major sources of economic growth and development. Expansion of these sectors can generate millions of jobs for the unskilled, semi-skilled and skilled workforce.
Furthermore, these sectors also play an important role in generating income in the formal and informal sectors.
“Share of employment in the construction sector has increased from 8% in 2018-19 to 9.5% in 2020-21. This increase shows that job opportunities are being created in the country,” the Economic Survey said.
Wholesale and retail trade had a 14.4% share in employment in 2020-21.
The employment level in transport/storage and communication remained the same in the period under review and the share in employment of the community/ social and personal service sectors increased from 14.9% in 2018-19 to 16% in 2020-21.
According to the Labour Force Survey 2020-21, the overall employment-topopulation ratio is 42.1% and this ratio is higher in males (64.1%) as compared to females (19.4%).
The employment-topopulation ratio is defined as the number of employed persons expressed as a percentage of working age population (10 years and above).
Province-wise comparison also shows the same pattern. In Punjab, the employment-to-population ratio is 44.2%, followed by Sindh (42.1%), Balochistan (38.6%) and Khyber-Pakhtunkhwa (36%), according to the survey.
Economy Survey data suggests Pakistan has created on an average 2.08 million jobs in each of the past three years compared to the projected 1.4 million. (The Express Tribune)
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