This post explains “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 coronavirus (COVID-19) not only severely affected Pakistan’s social structure but also its economy—as was the case for many other developing countries. Some of the major impacts of the 2019 coronavirus pandemic on Pakistan’s economy are discussed in the following paragraphs.
Impacts of COVID-19 on Social Life in Pakistan
Impacts Of COVID-19 on Pakistan Economy
Impact on Key Economic Sectors The United Nations Conference on Trade and Development (UNCTAD) reported in 2020 that Pakistan was among the world’s most affected economies by the pandemic. The crisis critically disrupted the operations of small and medium-sized enterprises (MSMEs) in the country. According to a November 2020 report by The Nation newspaper, Pakistan is home to approximately 3.3 million MSMEs, which account for 30 percent of the country’s GDP and 25 percent of its total exports. Over the past year, many of these businesses have shut down as a result of lockdown measures and the ensuing economic recession.
With weak health infrastructure and a high dependency on foreign aid and international trade, the outbreak of COVID-19 dealt a severe blow to Pakistan’s economic progress. A July 2020 report by Deutsche Welle noted that, in the months following the outbreak, Pakistan’s economy contracted by 15 million dollars, and it predicted a 10 percent decline in the nation’s Gross Domestic Product (GDP).
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Employment and Labor Market Challenges The International Labor Organization (ILO) warned that nearly 25 million workers worldwide could lose their jobs due to the pandemic. According to World Bank statistics, Pakistan’s labor force numbered 75 million in 2020, with the majority of workers employed on a daily wage basis. The successive lockdowns resulted in massive job losses and acute food shortages. Dawn newspaper reported in June 2020 that the number of jobless individuals in the fiscal year 2020–21 could reach 6.65 million. Similarly, while the unemployment rate was 5.8 percent in the fiscal year 2017–18 (as per the Pakistan Labor Force survey), it had risen to 8.1 percent by the fiscal year 2020–21.
Impact on Micro-Enterprises Micro-enterprises—including small shop owners, home-based businesses, and street vendors—have also been heavily affected. A report by the Pakistan Bureau of Statistics (2017–18) indicated that micro-enterprises accounted for 35.7 percent of the country’s total employment. These businesses rely greatly on public mobility and market activity; hence, the lockdowns and restricted public movement forced many to shut down after enduring heavy losses.
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Positive Economic Developments During the Crisis Despite the overwhelmingly negative impacts, the COVID-19 pandemic also brought about some positive changes. Notably, a decline in the country’s inflation rate was observed during the final three months of 2020. For instance, the inflation rate dropped from 8.9 percent in October to 8 percent in December. Moreover, Pakistan recorded an 18 percent increase in exports in December 2020, with total exports reaching a value of 2.35 billion dollars. Additionally, during the first quarter of the fiscal year 2020–21, the textile sector experienced a 2.2 percent growth in both production and exports.
Government Interventions and the Need for Sustainable Policies At the request of the Government of Pakistan, the United Nations Development Programme (UNDP) established a COVID-19 Secretariat at the Planning Commission to support the country socially and economically. Similarly, the World Bank approved a 200-million-dollar programme to help Pakistan navigate the crisis. To assist the most vulnerable populations, the government distributed more than 144 billion rupees among over 12 million families. However, these measures are only short-term solutions. For lasting recovery, the government must adopt robust and sustainable economic policies to address the ongoing challenges posed by the 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
Tags: 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. Impacts of COVID-19 on Pakistan economy. Impacts of COVID-19 on Pakistan economy. Impacts of COVID-19 on Pakistan economy. Impacts of COVID-19 on Pakistan economy.
