What are the Effects of Coronavirus on the Economy of Pakistan?
As the government, private businesses, civil society, and the public at large grapple with the emerging pandemic situation across the country, an important debate has evolved in many circles regarding the degree to which the scourge of coronavirus (COVID-19) might impact the Pakistani economy.
In the wake of the outbreak of Coronavirus, Pakistan’s initial economic losses in different sectors of the country’s economy have been estimated at Rs1.3 trillion. These losses are going to be incurred on account of the drop in the GDP growth because of reduction in the services sector, including airline business and others, FBR’s revenue loss, a massive decline in imports, exports, reduction in remittances, disruption in food supplies and other fronts.
Economic Sectors that are Highly Affected by Coronavirus
The shutdown of businesses will lead to a decrease in personal income meaning big purchases on things like cars or appliances will be postponed. This, in turn, could affect the reduction of gas consumption in welding and cutting applications in general manufacturing, the shutdown of businesses to practice social distancing in fighting against coronavirus will lead to a decrease in personal income meaning big purchases on things like cars or appliances will be postponed. There are few sectors that were highly affected by the coronavirus pandemic Import-export, halt on business, overpriced goods, and unemployment rate.
Import and Export
As people are not traveling due to the Coronavirus outbreak, the flights being operated to and from international and local are on hold. The tourist visiting Pakistan in summers gives a push in the GDP of the country. Other imports and exports are also very limited in these crises but thankfully there are many crops and vegetables Pakistan cultivate on its own land. Gas consumption in the food industry and carbon dioxide may go down due to less air travel. Pakistan’s textile export sector relies on China for the bulk of its capital goods inputs, so there will be an impact if there is a protracted closedown of the Chinese economy.
Overpriced Goods
The inflation rate in Pakistan has gone up to 12.93 which is highly alarming and it is a big indicator that there is going to be more price hike but the income slab of almost all lower-middle-class people and the poor will remain static. Pakistan is an agro-based country and is capable to feed many neighboring countries too but the increase in prices of regular items like wheat and sugar which have also recently gone short in supply is the main reason for inflation.
Businesses on Halt
Another crisis behind the destabilization of our economy is the investment crisis as most of the industries are closed due to government policies creating unemployment and nobody is willing to invest in Pakistan fearing the potential losses.
At this point, an investment may seem risky because of the pandemic situation but investment in the real estate world, it’s the opposite. Real estate investment is a lifetime where land value does not usually go down but increases with time.
The challenges that COVID-19 poses for the global economy will only be resolved by prioritizing the public health aspect of the pandemic, and a concerted effort to address imbalances in the world economy while encouraging more sustainable growth going forward. The post-pandemic world must be a better place than the one into which the virus descended.
Behind every tough time, there is a silver lining so stay positive, this till will pass too.
Also Read:
- Apartment Vs House: Which One is more Pocket Friendly?
- 10 Acts of Kindness Post and During Coronavirus