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The Outbreak of Covid-19 and Impact On Pakistan's Economy ?
The Outbreak of Covid-19 and Impact On Pakistan's Economy ?
The Covid-19 outbreak affected almost 106M people worldwide, as of recent updates. It was such a
severe disease that the World Health Organization (WHO) officially declared it a pandemic. In order to
control the spread of this disease many affected countries went into lockdown and took strict measures,
including Pakistan. The measures taken for social distancing were closing restaurants, prohibiting travel,
closing flight operations, restrictions of social gatherings, closing educational institutions, closing
marquees etc. All these measures had a huge impact on Pakistan’s economy. It led to a huge impact on
poverty, according to experts Pakistan will face an expected increase in poverty which will be 50% of its
population, which means that almost 120 million people are expected to face poverty by the end of 2020.
This poverty is caused by unemployment, which itself is affected greatly by Covid-19. According to the
World Bank, there are a total of 75 million workforce in Pakistan. According to Pakistan Institute of
Development Economics, it is estimated that 19-20 million workers will lose their jobs. All this
unemployment is caused because of lockdown and slow-down in the economic activities. Daily wagers
which make up to 47% of Pakistan’s workforce, which work in the service sectors are estimated to be
most worstly affected by lockdown due to this pandemic. To help people who lose their jobs, the federal
and Punjab government announced economic packages which included monthly payments of PKR 3K for
businesses and PKR 4K for workers. Consumer Price Inflation (CPI) also faced a decrease. The Pakistani
Stock Market also suffered greatly from this pandemic. The Currency Market of Pakistan also faced a
huge impact, the rate of dollar increased to 168 against Pak Rupee by the end of March. Gold prices also
saw a sudden increase reaching to around PKR 95K per tola. The agriculture sector of Pakistan was also
widely affected including farmers and production, due to lockdown because of Covid-19 the farmers
faced difficulty in access to seeds, planting material, fertilizers, harvesting machines etc. This disturbed
the economy greatly as it will result in lower yield and that will lead to very less supply of crops for the
animals to feed, which in return will affect the overall supply of meat, vegetables and milk to the people.
Steel Industry of Pakistan was also impacted, Pakistan was dependent on China and Japan to get raw
materials for it, but the Covid-19 largely affected the supply and now Pakistan will have to go with
expensive substitution which will increase cost of production and affect manufacturing and construction
activities across the country. Automobile industries were also largely affected, due to lockdown
companies such as Toyota, Honda, Suzuki were completely shut down and faced a lot of loss. The Textile
industry was also largely affected and some of them decided to shut down temporarily in order to prevent
build-up of stock. Real Estate sector was also affected, due to lockdown and ban in travel, it was difficult
between buyers and sellers to deal properly. The Tourism sector was severely affected, due to ban on
travel, closed flight operations and safety measures. It was unsafe and almost impossible for people to
visit places. The Education sector was also affected, to prevent the spread of disease all educational
institutions were closed and a new way of learning which is online learning at home was introduced to
students and teachers. Covid-19 also negatively affected development projects such as CPEC, as a result
the construction work on various projects was delayed.