The economic impact of Coronavirus
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| COVID-19 & Economy |
The outbreak of coronavirus severely impacted the
world economy. At that time no market in the world is not suffering from the
effects of Covid-19. Covid-19 has created the largest economic crisis after the
9/11 and global financial crisis of 2007-08. According to the (CRS) Congressional
Research Service estimation, the world GDP(Gross Domestic Product) will decline
by 2.0% per month if the same situation continues. And according to the WTO(
World Trade Organization, the world trade will be decreased by 32% in 2020. The effects of this virus on the China economy
are severe. The data collected from
different sources show that the China economy decline by 20% in the first two months of the COVID-19
outbreak. In all of this situation if no
one clearly says what will be happened but it is clear to say the COVID-19 will
have a severe negative impact on the world,s economy.
Impact on
Pakistan
This the
time when the economy in the world including Pakistan facing the economic
crisis. Pakistan is also affected by the coronavirus from global and domestic
level development taken in the world and Pakistan.
An economy that was just about to collapse in
back 2019 go to the IMF(International
Monitoring Fund), Where he signed an agreement with the IMF to receive $6
billion over 3 years. And the economy just starting to grow under reforms and
policies imposed by the IMF. At that time COVID-19 pause all the economic activities
in Pakistan. This stops the process of growth and causes to increase in
Unemployment, Hunger, and Poverty on a large scale.
The major part of Pakistan's population is daily
wagers and self-employed. The lockdown due to COVID-19 in Pakistan raises the number
of unemployed workers about 5 million. And which causes an increase in the national
unemployment rate by 14%, It increases the 20million people below the poverty
line.
GDP (Gross Domestic Product)
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| Pakistan GDP |
Pakistan is the least developed country in
Asia. Pakistan’s economy depends on manufacturing, agriculture, and remittance.
In 2016 IMF Chief announced in her assessment that Pakistan’s economy now out
of the crisis. And the World Bank predicted in 2016 that Pakistan’s Economy
Growth will increase to 5.4% in 2018. But in 2019 the IMF announced that the Economy
growth rate of Pakistan will 2.9% in
2019. But now the process which starts stabilize in
2020 will slow down due to the impacts of Covid-19 on Global and domestic markets.
The World Bank in his latest report fro Asia
announces that Pakistan’s GDP growth will be negative of 1.3% in
2019-20. And which causes 1% of GDP growth in 2020-21. This shows big negative
growth in Pakistan due to the Covid-19.
Solution:
In all of this situation, Pakistan has also a
lot of opportunities to grow to stabilize the economy. As Jim
O'Neill in his research paper, Pakistan is at number 11 in
those countries having a high potential of becoming the world’s largest economy
in the 21st century. There are some opportunities that Pakistan can
take advantage of to grow the economy.
1. The
world is facing a dramatic change in oil prices. 26% of Pakistan exports are price-driven.
It will decrease the Pakistan export bill and Pakistan's external account will
be improved. And causes a decrease in the current account deficit. According to
a report if 20$ per barrel oil prices decrease it will improve the 50% of the current
account deficit.
2. We
must take advantage of US-China tension. We need to create our supply chain and
attract foreign investors to allocate the resources to fulfill the world's
demand for the product.
References:
https://www.capitaleconomics.com/the-economic-effects-of-the-coronavirus/
https://gulfnews.com/business/covid-19-to-slowdown-pakistans-economic-growth-asian-development-bank-1.70803457
https://www.atlanticcouncil.org/blogs/new-atlanticist/south-asias-economic-outlook-in-the-era-of-covid-19/
https://en.wikipedia.org/wiki/Economy_of_Pakistan
