Name: Rana Sohail Iqbal

Registration # S21BMGMT2M01055

Programme: BBA (5th)

Semester: 1st

Session: Year 2021-23

Course: Pakistan Economy

Topic: Covid-19

Assignment # MID

Dated: 29-09-2021

Submitted by: Rana Sohail Iqbal

Submitted to: Ms. Hina Hameed

Q1. Elaborate Pakistan’s economy before COVID-19?
A1: Pakistan’s economy was growing slowly over the past two decades. Annual per capita
growth has averaged only 2 percent, less than half of the South Asia average, partly due to
inconsistent macroeconomic policies and an under-reliance on investment and exports to
drive economic growth.

Short periods of rapid consumption fueled growth frequently led to sizable current account
and fiscal deficits that ultimately required policy tightening, resulting in recurrent boom-bust
cycles.

Prior to COVID-19, Pakistan was making good progress with the implementation of the
economic reform program supported by the IMF (Extended Fund Facility) but because of
COVID-19, GDP is estimated to have contracted by 0.4 percent in FY2020 for the first time
since the 1950s.

Q2. How the COVID-19 crisis is affecting Pakistan’s economy?

A2: Pakistan has registered large numbers in effected cases of the coronavirus and over
5,700 related deaths. Prime Minister Imran Khan's says the drop in the daily number of new
coronavirus cases is due to its "smart lockdown" strategy, but the trend could be a result of
misreporting and inadequate testing. The pandemic has also taken a devastating blow on the
Pakistani economy.

Pakistan's already fragile economy had only just been moving towards stability when the
health crisis struck. Economists fear that the pandemic's economic fallout will considerably
derail the country's recovery process.

Pakistan's economy was shrinking, unemployment was rising and various sectors are in crisis
concerned about the long-term impact of the pandemic.

Pakistan's exports primarily comprise of textile products. These exports are down since the
COVID-19 crisis started, with some orders even being canceled. All of this will negatively
impact foreign reserves and ultimately the currency value. In the long run, financial markets
will also be negatively affected.

Q3. How do we bring growth back to the economy in Pakistan?

A3: The pandemic disrupted the progress that Pakistan made under the IMF-supported
program through 2020 and triggered a shift in government’s priorities.

The progress that Pakistan made included a temporary fiscal stimulus (1.2 percent of GDP),
mostly a large expansion of the social safety net via the Ehsaas Emergency Cash Program,
monetary policy support and targeted financial initiatives, as well as sizeable emergency
financial support from the international community, including from the Fund’s Rapid
Financing Instrument (RFI) and G-20 debt suspension.

However, the containment measures adopted in response to the COVID-19 pandemic led to a
severe contraction in economic activity during the final quarter of FY20. As a result, GDP
growth is estimated to have contracted by 1.5 percent in FY20.

Half of the working population saw either job or income losses, with informal and low-
skilled workers employed in elementary occupations facing the strongest loss in employment.
As a result, poverty incidence is estimated to have increased in FY20 from 4.4 to 5.4 percent,
using the international poverty line of $1.90 PPP 2011 per day, with more than two million
people falling below this poverty line. Moreover, 40 percent of households suffered from
moderate to severe food insecurity.

The government, therefore, focused on mitigating the adverse socioeconomic effects of the
pandemic through a stimulus package equivalent to approximately 2.9 percent of GDP and a
deferment of some of the fiscal adjustment measures.

On the production side, crop production was relatively weak in the first six months of FY21,
as cotton production was adversely affected by heavy monsoon floods. Following the phased
lifting of lockdown measures from 2020 onwards, indicators of industrial and services
activity have recovered, with “Large Scale Manufacturing” and business confidence indexes
exceeding pre-COVID levels in December 2020. As a result, the majority of the informal
workers affected by the crisis are expected have been able to return to work.

The IMF package of measures adopted by the Government has been well targeted to support
growth and the most vulnerable, while aiming at preserving fiscal sustainability.

The State Bank of Pakistan also swiftly adopted measures to support liquidity and credit
conditions, and to safeguard financial stability. Since the onset of the crisis, the authorities
have moved quickly to secure additional extra external funding.

Q4. Is the current government deal with COVID-19 in effective way? Discuss your
answer (yes / no) with logical justification?
A4: Yes the Government uses its full potential to fight with the covid-19 pandemic after
effects on the Pakistan economy.

The Government of Pakistan focuses on the consequences of impacts that have been exerted
by the selected variables inflation rate, exchange rate and interest rate on economic growth
rate.
Pakistan's public health system was overstretched long before the onset of the coronavirus
pandemic. Pakistan faces a shortage of 200,000 doctors and 1.4 million nurses to cope with
the crisis. Due to the pandemic, an additional 2.45 million people now suffer from food
insecurity.

In early 2019, in the face of a monetary crisis, Pakistan reached out to the International
Monetary Fund (IMF) for a bailout package worth six billion dollars. The economy was only
just recovering from the crisis when the pandemic struck.

Prime Minister Khan launched the Ehsaas Emergency Cash financial relief program on April
1 in an attempt to help the most vulnerable part of the population in the wake of the
pandemic. A total of 144 billion rupees was handed out to some 12 million families with
each family receiving 12,000 rupees per month.

Free vaccination was provided to the general public and to verify the vaccination certificate
was issued by NADRA. Health care workers go door to door in ruler areas to be vaccinated.

Education sector was fully closed and gatherings and events was fully banned. Smart
lockdown was initiated. Stay Home stay Safe and self-isolation guidelines was given as
hospitals were felled. Cellphones was given outcalls guidelines to be safe from covid-19
effects.

Q5. How educational sector is affected by COVID-19 in Pakistan?

A5: Pakistan was among the first countries in the world to institute widespread school
closures as a result of Coronavirus 2019 (COVID-19). While school closures have been
effective in supporting efforts at social distancing, they may well have serious consequences
for schooling and learning.

The results from a series of simulations that aim to capture the impacts that school closures in
Pakistan may have on the learning levels, enrollment, and future earnings of children and
students.

The education sector was affected as well as economy of Pakistan facies crises by Covid-19.
Private sector adopted technology advancement and compensate students through online
platforms for learning and completing their studies.

The Higher education also put its contribution by providing scholarships for deserving
students and industrial sector also lunches different internship programs for newly educated
students to support the economy.
Government of Pakistan make decision to regulate education sector and promote matric and
intermediate students to minimize the education loss to students. Somehow the students from
nursery to eights class was given a fair chance to study from only channel initiated by
Government and stay home and study as stay safe policy.