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Assignment #3: Impact of COVID-19 Submitted By: SHIWANI 17990

The COVID-19 pandemic is having profound effects on families, communities, businesses, financial markets and the global economy. The Asian Development Bank estimates that the virus outbreak could cost Pakistan's economy between $16.387 million to $4.95 billion, or 0.01% to 1.57% of GDP, and trigger 946,000 job losses. Many industrial sectors could be affected, especially textiles which rely on imports from countries that closed down factories during the pandemic. Another concern is Pakistan's national debt level of 38,727 billion rupees, near half of which is external debt that may be difficult to repay if the economy suffers significantly.

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27 views

Assignment #3: Impact of COVID-19 Submitted By: SHIWANI 17990

The COVID-19 pandemic is having profound effects on families, communities, businesses, financial markets and the global economy. The Asian Development Bank estimates that the virus outbreak could cost Pakistan's economy between $16.387 million to $4.95 billion, or 0.01% to 1.57% of GDP, and trigger 946,000 job losses. Many industrial sectors could be affected, especially textiles which rely on imports from countries that closed down factories during the pandemic. Another concern is Pakistan's national debt level of 38,727 billion rupees, near half of which is external debt that may be difficult to repay if the economy suffers significantly.

Uploaded by

shiwani khetpal
Copyright
© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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Assignment #3: Impact of COVID-19

Submitted by: SHIWANI 17990

We cannot overstate the profound effects that COVID-19 is having on our families, communities
and business, the financial market and the global economy, The impact on Pakistan economy is
dependent on the time line of handling COVID-19 and its intensity of spreading in surroundings.
Asian Development Bank (ADB) stated in its report that the virus outbreak could cost Pakistan
economy in the range of $16.387 million to $4.95 billion, or 0.01% to 1.57% of GDP. The report
also highlighted that this loss would plunge Pakistan's GDP by at least 1.57 per cent and trigger
946,000 job losses.
Many industrial sectors could be affected due to their integration to global market, Pakistan is
one of the major exporters of textile products, which is the key foreign currency earner,
Pakistan's textile sector relies on other countries for the bulk of its capital goods inputs. Since
lots of foreign companies were closed down during the pandemic, those textile factories will be
surely affected.
 decline in Pakistan's import bills, Actually, the country's eight months balance of trade i.e. July
2019 to February 2020 has improved by 26% to 15.77 billion as reported by Pakistan Bureau of
Statistics. Exports recorded a growth of 3.65% during the same period, increased from $15.1
billion to $15.65 billion whereas imports declined 14.06% from $36.56 billion to $31.42 billion
during the same period. It means the country's balance of payment improved 14.61% to $2.26
billion from $1.93 billion in the month of February. This gain could be eroded by the measures
for tackling the pandemic.
Another concern is about debt. State Bank of Pakistan data shows that the total national debt of
Pakistan stands at 38,727 billion Rupees in the second quarter of the fiscal year 2020, which is
88.9% of GDP in the same period. Near half of the debt is external, including loans from Paris
club, multilateral organizations, bilateral preferential loans and commercial loans, etc.
China extended currency swap agreement with Pakistan on May 2018 for another three years,
The spread of COVID-19 and the meltdown of global crude oil prices took place simultaneously
and these two events have been linked, international Monetary Fund (IMF), it has adopted strict
fiscal discipline. It intends to reduce the budget deficit to 7.5% of gross domestic product (GDP)
in the first year of the programmed.
There have been significant disruptions in the international trade flows of these countries. China
and Japan experienced more than 15 percent reduction in their exports. Rest of the three partners
had a reduction of around 5 percent. Some of them have also experienced reductions in their
imports.
The USA and China are the major importing partners and we heavily rely on them for the import
of capital and intermediate goods any economic downturn to these economies may face, would
directly affect our exports as well as our GDP, China as it closed its border and stopped trade
with the world. The resulting vacuum was filled by Pakistan through exports to these countries.
ur dependence on commodity exports with falling commodity prices amid Covid-19, shock and
reliance on intermediate products for export productions on importing countries such as China
would hurt our exports.

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