Impacts Of COVID-19 on Pakistan Economy – 8 Devastating Effects
The article discusses “Impacts of COVID-19 on Pakistan economy. Impacts on small business, MSMEs, micro enterprises and inflation. Essay, CSS notes. Impacts of corona virus on the economy of Pakistan 2020. Impacts of COVID-19 on Pakistan economy.”
The novel COVID-19 not only severely affected the social structure of Pakistan but also its economy like many other third world countries. Some of the major impacts of 2019 corona virus pandemic on the economy of Pakistan have been discussed in below paragraphs.
Impacts of COVID-19 on Social Life in Pakistan
Impacts Of COVID-19 on Pakistan Economy
United Nations Conference on Trade and Development (UNCTD) in its 2020 report listed Pakistan one among the world most affected economies by the pandemic. The pandemic critically affected the working of Small and Medium Size Enterprises (MSME’s) in the country. According to the Nation newspaper November 2020 report the total number of MSME’s in Pakistan is 3.3 million which counts for 30 percent of the country’s GDP and 25 percent of total exports. Over the past one year many small and medium size businesses have shut down due to lockdown and recession in economy.
With weak health infrastructure, high dependency on foreign aids and international trade, the outbreak of COVID-19 proved a blow for the economy of Pakistan. It pushed down the economic progress of the country. According to Deutsche Welle (D.W.), the famous German news broadcaster news channel and e-news paper July 2020 report Pakistan’s economy due to the pandemic has shrunk by 15 million dollars over the past few months since the outbreak of the disease. The report has also predicted a 10 percent decline in GDP (Gross Domestic Product) of the country.
COVID-19 Pandemic A Divine Curse Or Cure?
The International Labor Organization (ILO) has warned that almost 25 million labors around the world could lose their jobs. According to World Bank statistics the total number of Pakistan labor force in 2020 is 75 million. In Pakistan majority of labors are those working on daily wage. Due to COVID-19 pandemic and successive lockdowns a large number of workers lose their jobs and faced acute shortage of food during these days. Dawn newspaper in its June 2020 report has predicted an incline in the number of jobless people in the country to 6.65 million in the fiscal year 2020-21. Similarly unemployment rate in the country in the fiscal year 2017-18 was reported 5.8 percent by Pakistan Labor Force official survey which has now reached to 8.1 percent in the fiscal year 2020-21.
The pandemic has also affected micro enterprises in the country. Micro-enterprises include small shop owners, household business and street vendors. Pakistan Bureau of Statistics report (2017-18) shows micro enterprises accounted for 35.7 percent of the country’s total employment. These businesses heavily rely on public mobility and market operation. Due to lockdown and limited public mobility a large number of micro-enterprises after heavy loss shut down their businesses.
COVID 19 Exposed Health Disparities in Pakistan
Aside negative impacts the COVID-19 pandemic also brought some positive changes to the economy of Pakistan. A decline in country’s inflation rate has been observed especially in the last three months of 2020. In October the inflation rate was 8.9 percent while in December it has declined to 8 percent only.
Similarly in COVID-19 crisis, Pakistan witnessed a record increase of 18 percent in its exports particularly in the month of December. In the last month of 2020 the total export of Pakistan reached to worth 2.35 billion dollars.
During the first quarter of the current fiscal year 2020-21 the textile sector of Pakistan also saw a growth of 2.2 percent in its production and export.
On the request of government of Pakistan, United Nation Development Programme (UNDP) established a COVID-19 Secretariat at Pakistan’s Planning Commission to support the country socially and economically. Similarly the World Bank has approved a 200 million dollars programme to help the country in the crisis. To help poor in the crisis the government distributed more than 144 billion rupees in more than 12 million families but all these are short terms solution. The government therefore needs to adopt the most robust economic policy to cope with country’s economic crisis amid COVID-19 pandemic.
References
In the preparation of above article author has taken help from the following websites.
- DW.COM
- Tribune Newspaper
- The Nation Newspaper
- World Bank Official Website
- Pakistan Bureau of Statistics
- Reuters
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