COVID-19 and Pakistan's economy.

The coronavirus, codenamed COVID-19, was first traced and reported back on November 1, in the Wuhan city of China and has since wreaked havoc worldwide. With over 8.66 million reported cases and approximately 460,000 deaths to date, it was declared a global pandemic by WHO on March 11, 2020. Although the exact source of this RNA virus remains to be officially named, amidst numerous conspiracy theories and opinions, it is believed to have been contracted from a species of bats and contrary to popular belief, it is neither caused by 5G towers nor does some multibillion-dollar corporation have a stake in its spread.

A global recession seems inevitable as worldwide trade continues to contract which is predicted to be much more potent than the ones caused in 1945 and 2009. With reference to the IEA Oil Market report, the worldwide average oil consumption is expected to contract by a record 9.3 mb/d comparative to 2019 in relation to the twin demand and supply shocks caused by containment measures across 187 countries.

The economy of Pakistan paints a similar picture: with the country being a low-income developing entity, its economic metrics were showing signs of mild improvement prior to the pandemic and inflation was expected to stay at a single digit figure after soaring to 7.3% in 2019.

With the spread of COVID-19, China had to restrict its trade, and the majority of that vacuum was redirected to the remaining Asian states. Loss of a major supplier meant higher lead times, inability to meet export orders and potential loss of international customers, all of which are conditions that raise doubts over the ability of an entity to operate as a going concern.

The lockdown dictated a large part of how commodities were locally consumed and there was a drastic increase in the consumption and hoarding of consumables subsequent to the imposition of the lockdown (as seen in the case of perishable consumables and medical supplies).

The transportation sector accounts for 12.89% of the GDP and 5.7% of the national labour force and whilst courier services remained functional to some extent, passenger transportation had completely halted in most instances. Services such as Metro had to cease their primary operations (incurring further losses of PKR 500bn) and it became increasingly difficult to source airplane tickets, which in some cases were selling at a premium of up to 40%.

The textile sector contributes 8.5% to the total GDP and 56% to the total...