Challenges Faced by Pakistan’s Economy Due to COVID-19: COVID-19 has struck the world with an unexpected crisis that no one was prepared for – Pakistan being no exception. The novel coronavirus dismantled economies worldwide, with the developing third world countries bearing the brunt of the damage due to their weaker institutions and unstable political and social conditions.
COVID-19 Impact on Pakistan’s Economy
In the recent few weeks, the COVID-19 situation has started getting precarious in Pakistan again with the rising numbers of cases and deaths reported per day. The major cities of Pakistan have a much higher positivity rate with hospitals reaching maximum capacity and resources running thin. These serious circumstances led to the government taking action to control the spread of the virus and minimize the potential threat that lurks very near.
The basic course of action for many governments around the world has been to impose lockdowns that limit the activity of people and businesses, thus controlling the spread of the novel coronavirus due to social interactions. These social impositions though necessary, have brought forward another major issue for Pakistan, with its economy taking a hit and suffering losses because of small and medium sized businesses being forced to shut down due to lack of business and sales.
Commercial markets, amusement parks, restaurants, marriage halls and cinemas have all been put under control or closed under law to discourage movement of people and social gatherings. These steps have been taken for the safety of the people but many are raising complaints because of them being laid off of work and struggling to earn money to support their families. Pakistan already has a strained economy and the present government inherited a vulnerable and debt-ridden economy, so the recent events have presented a grave challenge for the country.
Outbreaks of such scale also put the focus on the fractured health system and institutions of Pakistan that are struggling to keep up with the needs and requirements of the current pandemic head-on. There are limited resources available for the health sector to deal with the crisis and is struggling to remain afloat.
A downturn in the GDP of Pakistan has been observed due to the current situation however, the growth rate of the country which took a downward turn in 2020 with a figure of -0.39% is now expected to recover with a growth rate of 1.5% states IMF. Investments also dropped with investors being uncertain about economic performance, with Foreign Direct Investment (FDI) in power, telecom and financial services dropping especially. Real estate sector of Pakistan also suffered with a decline in real estate investments, leading to many problems to arise for real estate developers in the country.
What is the Way Forward?
This past year has been a hard one for everyone, with people losing their loved ones to people struggling to obtain basic resources to fulfill their living needs. However, the problem is still very present and requires attention of everyone. The current state of affairs is prone to take a turn for the worse if the common people do not realize the part they play in the improvement or decline of the crisis.
Everyone is accountable for their actions and have a responsibility to follow the SOPs provided by the government and health officials. Practice social distancing, limit your activity and get vaccinated when eligible, to overcome this crisis for a safer and stable future. That’s all from blog “Challenges Faced by Pakistan’s Economy Due to COVID-19”