COVID-19: Impacts on Pakistan’s Economy
The pandemic which started as a minute viral outbreak in Wuhan has now
engulfed the whole planet, this Coronavirus pandemic has created a havoc
and wreaked the international economy. Both developing and developed
countries are seeking to grapple with the pandemic. All of them are
facing limitations in their resource capacities with short fall being
more severe in the developing countries like Pakistan (Chohan, 2020).
Pakistan is on the brink and there is a tight rope in front of a weak
economy. The virus which was introduced through the travelers coming
from countries like Iran has now more than eighty thousand coronavirus
cases with almost one and a half thousand deaths which is increasing by
each passing day. The only way to limit the spread of virus is social
distancing and isolation which can only be achieved by strict lock down
of cities and villages as well. If this step is not persuade, then there
will be a risk of massive infection outbreak, while, by taking this
step, complete lock down can suffocate the economy of country in
numerous ways (Butt, 2020).
Due to lock down, the movement of imports and exports in the whole world
has been disturbed. The business in European countries specially in U.S
has shut down due to which exporters from Pakistan are unable to process
their orders and also the payment from previous orders has also been
adjourned. The Cargo and goods movements has also been blocked making it
more arduous to maintain the flow of business (Baloch, 2017). Similarly,
imports also cannot be completed as every major city in the world is
hanged due to lock down. There is a large number of private companies in
Pakistan that rely heavily on imports for running successfully, and now.
due to lock down, they are badly suffering by financial means.
Commercial importers will suffer in a way of complete shortage or delay
of material goods. Similarly, the industrial importers will suffer from
the shortage of raw material that will lead to salary cuts and then
finally job losses (Rehman, 2020). According to PIDE (Pakistan Institute
of Development and Economics) around 2.4% of annual GDP will be lost
due to COVID-19 pandemic which is enough to send the country into a
spiraling recession (Butt, 2020). Recently,
The Economic Coordination
Committee (ECC) approved firing 9,350 employees of the Pakistan Steel
Mills (PSM) and another 250 will be let go within three months.
(Shahzad
Paracha, June 3, 2020)
Secondly, the closure of offices, school, factories and markets will hit
the daily wagers and middlemen. There is a possibility of mass
bankruptcies which can lead to complete collapse of country’s economy.
Also, on the other hand, Pakistan’s key currency earner, the textile
industry which rely on other countries for bulk of their capital goods
inputs, is highly effecting because due to this pandemic, all countries
have shut down their trades. Loses to this sector is highly going to
affect Pakistan’s economy (Almas & Macroeconomics, 2020). This year is
perhaps the most formidable challenge the Pakistan is facing, but, if we
fail in managing these economy crises and spread of virus then the
coming year would be going to worsen than our darkest nightmare’s (Butt,
2020). A comparison of Pakistan’s economic condition is shown in table
4: