ISLAMABAD: The Planning Commission of Pakistan has revealed estimates that current pandemic crisis could force the country’s GDP growth to slow down by 0.8 to 1.3 percentage points to 2-2.5 per cent in 2020.
This would lead to readjustment of most macroeconomic targets.
Deputy Chairman Planning Commission Mohammad Jehanzeb Khan said, “The COVID-19 pandemic has rattled global markets and economies with breakneck speed. The impact has also adversely affected emerging markets, including Pakistan”.
“Effects of the virus will be wide-ranging, from depressed international trade, lower foreign remittances, suppressed GDP growth to a reduction in government’s revenues (and increase in expenditure) and impact on the real economy which will lead to high unemployment figures. While it is hoped that the virus may be contained in the foreseeable future, the economic impact is likely to reverberate well beyond the short-term horizon,” he explained.
During a recent meeting of the P-Block on videolink where ministers and donors agencies’ representatives participated, it was discussed that the UNDP resident coordinator was assigned to coordinate with different UN agencies with the mandate to measure exact amount of losses incurred to the Pakistan economy due to the coronavirus crisis and resulting lockdown.
“The UNDP shared a detailed report with the Pakistani side on Thursday during this official meeting to identify social and economic aspects that will have a far-reaching negative impact on the economy of Pakistan,” said the official sources.
The World Bank representatives also presented their findings identifying sectors to develop an action plan for mitigating the social and economic impact of the COVID-19 pandemic.
In response to a Planning Commission member’s objection as to why multilateral donors were assigned to prepare an action plan for Pakistan’s economy in the presence of the Planning Commission and its research arm, an official replied to the objection saying that donors’ endorsement was necessary, indicating that Islamabad intended to seek more foreign loans from donors to overcome its economic woes.
The official said that the National Coordination Committee (NCC) constituted by the government had tasked the deputy chairman of the Planning Commission with assessing the exact economic and social losses caused by the outbreak of coronavirus in the country.
The Planning Commission has since summoned meetings of all ministries/divisions and attached departments as well as provinces to come up with their expected losses.
The Planning Commission high-ups expect GDP growth slowdown in the range of 0.5 to 1.3 points, but authorities termed the 0.5 point loss estimate as “conservative and bureaucratic” and stated that losses were obviously on the higher side.
They estimated that the losses on GDP front stood in conservative estimates in the range of 0.8 to 1.3 points at least and its effects would also continue impacting GDP growth for the next fiscal year as well so that next year’s projected target can be slashed down.
PIDE is the research arm of the planning commission that includes economists, specialists and researchers belonging to all fields.
