Islamabad: Pakistan is estimated to have faced an economic loss of up to Rs2.5 trillion because of the COVID-19 pandemic in the current fiscal year.

This was the near-consensus reached by various international lending agencies and different arms of the government attending a meeting presided over by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh.

They also agreed that the pandemic would have a spillover impact in the next fiscal year.

The meeting was informed that the size of the national economy as measured by the gross domestic product (GDP) had shrunk from Rs44tr to about Rs41.5tr, down by Rs2.5tr.

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Another estimate put the loss at about Rs1.6tr based on the growth rate. Under this estimate, the GDP was originally estimated to grow by 3pc during current fiscal year, but it actually contracted by 0.4pc, which meant the total GDP loss of 3.6pc or Rs1.58tr.

Pandemic will also have a spillover impact in the next fiscal year

For the next year, too, the Planning Commission has estimated the GDP growth rate of 2.3pc but the ministry of finance, State Bank of Pakistan, Asian Development Bank, the World Bank and the UNDP do not consider it to be a realistic estimate and they have projected about 1.9pc growth rate for the next year given the continuation of contraction impact in Pakistan’s trading partners and domestic economic challenges.

Mr Shaikh asked the international development partners and the government agencies to continue evaluating the losses suffered by Pakistan’s economy due to COVID-19 to help the government come up with a swift and robust policy response.

The meeting was held to evaluate the economic losses suffered by the country’s economy due to COVID-19.

The meeting was also attended by Minister for Industries and Production Mr Hammad Azhar, Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood and senior officials of the finance division.

The adviser appreciated what he called an excellent work done by the Planning Commission, the State Bank of Pakistan and the development partners in assessing and evaluating the losses suffered by the country’s economy in the wake of COVID-19.

He said that the government had announced its Rs1.2tr stimulus package not only to help the businesses but also to help the poorest segments of the people to alleviate their miseries and suffering to some extent.

Earlier, the State Bank of Pakistan Governor, Reza Baqir, who attended the meeting by Zoom, presented a detailed analysis of the State Bank of Pakistan as well as its policy response to the economic impact of COVID-19.

Mr Xiaohong Yang, Country Director for Asian Development Bank in Pakistan, also gave a detailed presentation on the economic losses suffered by countries in Asia in general and by Pakistan in particular due to Coronavirus.

The data presented by the ADB also showed promising signs of recovery in Pakistan’s economy in the post-COVID-19 scenario.

During the meeting, Julien Harneis, United Nations Resident Humanitarian Coordinator in Pakistan, and Mr Patchamuthu Illangovan, Country Director of the World Bank in Pakistan, also provided similar data.

Mr Asif Saeed, Member of Planning Commission, also presented a detailed report prepared on the instruction of the government on economic losses suffered by the economy due to COVID-19.

Published in Dawn, June 6th, 2020

https://www.dawn.com/news/1561551/pakistan-has-suffered-rs25tr-loss-because-of-COVID-19