CORONAVIRUS OUTBREAK AFFECTS PAKISTAN'S ECONOMY.

Byline: S. KAMAL HAYDER KAZM

T he analysis of economic survey of Pakistan FY2019 showed that the growth momentum of the Pakistani economy, at 5.5 percent in FY2018, became unsustainable because of growing macroeconomic imbalances i.e. high and rising fiscal and current account deficits. In Pakistan's economy the twin deficits always persisted, however, in FY2018 trade deficit was historically high both in monetary value ($ 32 billion) and as a percent of GDP (10.1 percent), while the fiscal deficit stood 6.5 percent of GDP.

The analysis also showed that the contained inflation and maintained exchange rate accelerated the growth in local demand. High consumption expenditure and government spending in turn led to massive surge in imports. Some of required adjustments on fiscal accounts and exchange rate were delayed during FY2018 being an election year, that resulted in depletion of foreign reserves and increase in monetary borrowing. As such, there was an urgent need to address these rising imbalances, mainly in external accounts, by taking strong initiatives to curb the growth of money supply and realign exchange rate to market situations. These Initiatives will have an adverse short term effect on the fiscal imbalances and there would be a need to address them in upcoming eras. No doubt, the global outbreak of coronavirus including in Pakistan, which has affected the operation of industrial units, business activities mainly educational system, will certainly affect the economic performance of Pakistan in future.

The experts showed that Pakistan's initial economic losses in dissimilar sectors of the country's economy have been predicted at Rs1.3 trillion. These Losses are going to be incurred on account of drop in the GDP growth due to reduction in services sector, counting airline business and others, FBR's revenue loss, massive fall in imports, exports, reduction in remittances, disruption in food supplies and other fronts. However, the preliminary assessment of losses done through the Asian Development Bank (ADB) and shared with Pakistan's concerned authorities reached at $5 billion but the country's top official stated that these estimates were less than the predicted actual losses because there was no basis for it.

Different sources recorded that work is under progress and the exact losses going to be faced through the national economy due to eruption of this virus would be firmed up in present days. Statistics identified that the...