There is little doubt that the pandemic COVID-19 is going to have a highly negative impact on Pakistan’s economy. As per expert calculations, the number of people living below the poverty line might double, going up to 125 million from existing figure of 50 to 60 million. Recently, a high level meeting was held in the Planning Commission with the participation of international donors to assess the extent of damage done to the national economy by the epidemic. According to an estimate, the number of unemployed because of COVID-19 stands at 19 to 20 million. As far as the prevalence of poverty is concerned, Pakistan’s 50 to 60 million people were already below the poverty line and the figure is now expected to touch 125 million due to the COVID-19.Other issues that have come to the fore is the long term impact on supply chain the labor market especially daily wagers and street vendors.
Reportedly, at the Planning Commission meeting, the representatives of different ministries, divisions and departments gave their respective updates about the losses caused by the coronavirus. According to the FBR, the buoyancy in taxes would be affected negatively and the Bureau might have to face further revenue loss in the range of Rs 300 billion to Rs 380 billion from March to June 2020. It may be pointed out here that the FBR had already faced massive revenue shortfall since the target was already revised downward from Rs 5.555 trillion to Rs 5.238 trillion. The government, though, had requested the IMF to slash down the target to Rs 4.8 trillion. In view of the fresh assessment in the wake of COVID-19 epidemic and continuing lockdown for three and half months, the FBR would be able to collect around Rs 4.4 trillion at the maximum. Among other things, a drop
Previously, Pakistan did well in its battle against poverty. Poverty levels declined by 40 percent over the last two decades to 24.3 percent in 2015. Now the IMF projects a sharp reversal, with up to 40 percent of Pakistanis living below the poverty line in the wake of Covid-19. To make matters worse, the real GDP growth is expected to slow by 3 percent, with sharp downturns in services and manufacturing. Agriculture will also suffer if lockdowns continue and disrupt needed transportation, logistical support, labor, and access to inputs for the next plantation season. The worst sufferers will be people already living below the poverty line women, children, people with disabilities, the elderly, and other marginalized groups whose lives, livelihoods, nutrition, and access to basic services are least secure.
Another stark fact is that about 42 million children are now out of school, while 17 million children under five are missing routine vaccinations. An additional 2.45 million people—beyond an existing 40 million—now suffer food insecurity. UNDP has recommended that the government of Pakistan must prepare emergency plans to reach out to the most vulnerable sections through economic relief packages and social sector services.