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: