The federal government and provincial governments in Pakistan are focusing on to stop the spread the Coronavirus (COVID-19) across the country. There are 184 confirmed cases have been reported so far. Sindh government has so far proactively taken measures and actions on ground to contain the spread. Punjab government is lagging is lagging behind in its actions to trace down the people returned from Iran.
Pakistan has taken appropriate measures to contain the spread of epidemic in the country. The possible spread could dash the hopes of PTI government for the early recovery of economy from a crisis. The precautionary measures have taken so far to curb the epidemic would further slowdown the economic activity. But these steps are necessary to save lives.
The National Security Committee (NSC) meeting on Friday decided to take precautionary measures to stop the spread of coronavirus in Pakistan. The decision was taken after the confirmation of 28 cases of Coronavirus patients in the country.
The NSC in its meeting chaired by Prime Minister Imran Khan and attended by the services chiefs of armed forces-chief ministers and federal ministers decided to form a National Coordination Committee to effectively curb the spread of coronavirus by evaluating the situation on day to day basis.
The NSC also decided to close all the educational institutions for three weeks. A ban imposed on all sort of public gatherings. The international flights will only operate from three airports Islamabad, Lahore, and Karachi. No other airport in the country will operate the international flights. The Western border with Iran and Afghanistan will remain completely shut down for two weeks.
While the seaports would remain open with increased precautionary measures and surveillance to detect any suspicious cargo without affecting the trade activities. The global impact has already slowdown the world trade and shipping activities. Many countries are under lock down and restricting the imports.
These measures will impact the business activities in the country. According to the World Bank and IMF estimates –Pakistani GDP growth could fell below the earlier estimates of 2.4 % during the current financial year.
As it started to spread in Pakistan in recent few days-Coronavirus is going to have an adverse impact on Pakistan’s economy like it has taken its toll on the global markets and the economy. Until now, the virus has reached 157 countries, affecting their economies, supply chains, production lines, and equity markets.
The virus, since its outbreak in mid-December 2019, has caused turmoil in the world’s second-largest economy, China, with a trickle-down effect on nearly all big economies including those of the European Union, United States, Japan, and South Korea.
The economists and experts stands divided on severity of the impacts in Pakistan. Some see it as an opportunity to increase exports and to improve balance of payment. But others are pessimistic and warning the government not to underestimate the impacts on the economy.
The leading Pakistani economist and former finance minister Dr. Hafeez Pasha has warned and said “look at the global economies, stock markets have collapsed and oil prices are tumbling. Apart from gold, everything is disturbed due to the fast growing infections; one can have an idea of the negative impact on Pakistan’s economy.”
Another economic expert Aftab Ahmed said that Pakistan is underestimating the possible impact of COVID-19 on the economy. He was of the view that it could lead to a negative growth in Pakistan.
“In China, the virus is likely to cause a 25% drop in GDP in the first quarter of 2020, to 4.5% from 6%.” “Globally, the epidemic is likely to result in a revenue loss of $1.5 trillion in the whole year.”
The Pakistani Stock market has already crashed- shedding 10,000 points and losses of RS 1.31 trillion in last two months. The investors in Pakistani stock market is following the negative sentiments of the slump in global stock markets is a clear indication that investors are bracing for a much harder landing for Pakistan.
Pakistani economy was under stress before the arrival of COVID19. It may deal a blow to our already stressed economy. In the longer run, Pakistan may have to allocate massive additional resources to tackle the challenge and improve its healthcare facilities.
The Asian Development Bank has projected a loss of $5 billion to the Pakistan economy in case of a major outbreak. It would sink the GDP by 1.5 per cent and trigger joblessness, depriving 946,000 of their livelihood. The bank expects the private businesses to be hit the hardest, losing as much as $1.9bn, followed by agriculture and mining that may take a blow of $1.5bn, hotel and restaurants $254 million, light and heavy engineering $671m and transport $566m. In the best-case scenario, the loss could be contained at $16.2m and in a moderate-case scenario; Pakistan could suffer a $34.2m impact.
It studies the impact on various sectors of the continent including but not limited to agriculture, mining and quarrying, business, trade, public services, hotels, and restaurants and other personal services, light/heavy manufacturing utilities, and construction and transport services. The range of scenarios determined in the analysis suggests a global impact in the range of $77 billion to $347 billion, or 0.1 percent to 0.4 percent of GDP. In best case scenario, the impact on Pakistan would be limited to a $ 16.4 Million.
However, if the outbreak in China is more widespread and last longer, with travel bans and precautionary measures, the impact on Pakistan would be around $4.95 Billion besides loss of 0.946 million (946,000 people) employment.
It projected that in best case scenario, Pakistan’s agriculture and mining sector could sustain a loss of USD 5.5 million; business trade, personal and public service USD 5.54 million; hotels and restaurants USD 0.67 million; light and heavy manufacturing USD 3.6 million and transport services USD 0.92 million, the report said.
The lock down in China and closing of borders with both Afghanistan and Iran could impact the Baluchistan province the most as it is the hub of cross-border trading activities with Afghanistan and Iran.
The economic impacts really depend on the actual length of this epidemic. If we could curb the spread and lift the precautionary measures and steps quickly than its impact would be minimum and limited. But if it took longer than it would have more severe impacts.
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02 April, 2020