Coronavirus Pandemic: Economic fallout in the country may further deteriorate

The persisting coronavirus pandemic is expected to have far reaching negative impact for economy in Pakistan as the number of people living below the poverty line might get doubled going up to 125 million from the existing figure of 50 to 60 million, Planning Commission disclosed the country’s economic condition.

In a high-level meeting chaired by Deputy Chairman Planning Commission Mohammad Jehanzeb Khan on Thursday shared the Planning Commission’s report with international donors.

Pakistan Institute of Development Economics was assigned earlier to come up with estimated figures in the meeting that would show the negative impact of COVID-19 on Pakistan’s GDP growth.

Dr Nadeem Ul Haq, Vice Chancellor Pakistan Institute of Development Economics (PIDE), think tank of Planning Commission stated that the number of unemployed because of coronavirus might be reach at 19 to 20 million, official sources confirmed the news.

About poverty conditions in the country, he said that Pakistan’s 50 to 60 million people were already living below the poverty line and the figure was expected to touch 125 million due to the coronavirus pandemic, while 19 to 20 million were expected to lose their jobs.

The government in the meeting was asked by  international donors’ representatives about calculation on two issues including what will be the long term impact on supply chain and second what will be the impact on labor market especially daily wagers and street vendors?

During the meeting, it was also feared that some cases of COVID-19 were recently reported from rural parts of Islamabad Capital Territory (ICT) and other parts of the country. It was also discussed that the reaping season of wheat is approaching and there were increasing fears that the lingering pandemic might affect rural population destructively.

During the meeting the representatives of different ministries, divisions and departments gave updates about the losses caused by coronavirus as the FBR estimated that the buoyancy in taxes would be affected negatively and the revenue bureau might have to face further loss in the range of Rs 300 billion to Rs 380 billion from March to June 2020.

It is to noted that the FBR had already faced enormous revenue shortfall so far as the target was already revised downward from Rs 5.555 trillion to Rs 5.238 trillion. The government had already requested to the IMF to slash down the target to Rs 4.8 trillion.

In the wake of coronavirus and the locked down for three and half months period, according to the fresh calculation, the FBR would be able to collect around Rs 4.4 trillion maximum.

The revenue board was told during the meeting the POL consumption dropped massively in the aftermath of lock down in different parts of the country and it is affecting the revenue collection adversely.

Further, the Planning Commission following the assessments asked the ministries and divisions to come up with required information on one sample format so that the information could be translated into policy action. The designated format would also help the policy makers to track down and monitor the policy interventions, reports said.