The Impact of COVID-19 and the Current Economic Situation of Pakistan

The Impact of COVID-19 and the Current Economic Situation of Pakistan

In the space of a few months, COVID-19 has wreaked havoc across the globe, shutting down business and borders. Pakistan is no different. The country is in a state of lockdown, with the total count for COVID-19 cases in Pakistan standing at 4,263 as of 9th April, 2020.

One must remember that 4,263 is only the number of people who have been tested, while the masses remain untested and oblivious to the fact that they may be carriers.

The global impact of this pandemic has seen a major drop in the crude oil industry as well as the tourism and hospitality sectors. Following suit, stock markets have also plummeted. The trend is mimicked in our local arena, where the Pakistan stock market has dropped by 10% ⁽¹⁾.

According to a Pakistan Bureau of Statistics (PBS) (2) the exports of Pakistan have reportedly plummeted by 12.9% in the month of March only. Similarly, the total imports of Pakistan have also declined by 18.7% as per last month. Whereas the Ministry of Commerce (3) estimates a loss of up to $4 billion due to cancelled export orders. The Asian Development Bank (ADB) reports that the virus outbreak could cost Pakistan’s economy in the range of 0.01% to 1.57% of the GDP (4) and trigger 946,000 job losses.

Businesses in the FMCG sector have noticed a surprising surcharge in sales (both offline and online) due to the mass purchasing and it is only to increase with the upcoming month of Ramadan as is the general trend in Pakistan. On the other hand, the manufacturing sector has been heavily impacted due to the unforeseen closure of factories and manufacturing units directly impacting the production and supply of goods.

In the marketing arena, the pandemic has changed consumer behavior to a large extent. The mall-goers, movie-watchers, shopping fanatics and foodies have all been directed to stay at home. With less people on the street, traditional out-of-home advertising will take a big hit, whereas digital advertising can take center stage.

The aftermath of COVID-19 in China ⁽⁵⁾ shows that online buying increased for grocery, cleaning supplies, yoga mats, pajamas and kitchen utensils, while take-outs and fashion suffered.

In this situation, the common man is the one who will suffer the most. The vast majority of the population is surviving by hand to mouth. 47% ⁽⁶⁾ of the service sector is made up of vulnerable people who own small kiosks, work in marriage halls and hotel industry and roadside laborer. These people find themselves with no means of fulfilling their basic needs other than relying on ration bags distributed by NGOs and going door to door to ask for handouts.

In these uncertain times, Pakistan’s government must take the necessary measures to ensure that the economy and the population survives this pandemic. The UN reports ⁽⁷⁾ that G20 leaders have pledged to provide more than $5 trillion into the global economy to secure jobs and minimize losses. This news may seem like a relief to many. However, with only 2 weeks into the official lockdown, it is difficult to predict what the future holds for us.

With China’s COVID-19 pattern, one thing is for certain, things will become worse – before they can get better.

My Personal Message to everyone out there.
In this time of adversity,
Just breathe, sit back and relax

You’ve already collected too many stacks
Let go of the money struggles, economy’s bound to crash
We’ll see to it later, for now stop being brash

Unplug, disconnect and connect with nature
Find your inner peace and have faith in future

Stop blaming each other for the spread
Put your hands together and pray to God instead

It’s time for you to open your eyes
Count your blessings because you’re alive
Spend time with your family in self quarantine

You’d wished for a break and now you’ve got it
Pay attention to your children
Feed the hungry but maintain your distance
Your kindness is needed for their existence

Cherish these moments and go with the flow
Everything will soon be fine Inshallah.

• Spread of COVID-19 and Pakistan’s economy
• Dun & Bradstreet: Impact of Coronavirus on Pakistan’s economy
• Impact of COVID-19 on economy of Pakistan
• E-commerce drives China’s stay-at-home economy in coronavirus aftermath
• Economic consequences of COVID-19
• Pakistan will be among hardest-hit economies by coronavirus crisis, says UN report