UN economists have warned that the deadly Corona virus epidemic could cost the global economy $4.0 trillion this year and called on governments to ramp up spending to mitigate its impact. A new report from the UNCTAD, a Geneva-based UN agency, concluded that the spread of COVID19 will push some countries into recession and will significantly slow growth in the world economy as a whole.[1]

COVID-19 is likely to have significant impact on the Pakistan economy because it comes at a time when several major indicators of the economy were already in a downward slope and facing an economic crisis. In the wake of outbreak of Coronavirus, Pakistan’s initial economic losses in different sectors of the country’s economy have been estimated at Rs1.3 trillion. These losses are going to be incurred on account of drop in the GDP growth because of reduction in consumption (74%) including food & beverage, transport, recreational & culture, education services sector, restaurant & hotel and other discretionary; government expenditures (33%) including debt servicing; and investment (71%) including private investment.[2] The Asian Development Bank (ADB) estimates that national GDP could fall by from 3.3% to 2.6%.[3]

Due to the likely economic recession and vulnerability of the employed in the country, the COVID-19 may lead to significant increase in poverty and unemployment.

Poverty Index:

The current COVID-19 outbreak is bound to hurt the population’s economic condition resulting in an increase in poverty. According to the Cost of Basic Need (CBN) approach, 24.3 percent of the population lives below the poverty line ($1.90 per day) in Pakistan.[4] Apart from this, Pakistan also uses the Multidimensional Poverty Index (MPI) based on education, health and living standard dimensions. About 39 percent of Pakistanis live in multidimensional poverty.

[1] Monthly Economic Update- March (2020) by Ministry of Finance Division

[2] Chohan, Usman W. “Forecasting the Economic Impact of Coronavirus on Developing Countries: Case of Pakistan.” (2020).

[3] Asian Development Bank: Asian Development Outlook 2020

[4] Economic Survey of Pakistan 2018-19

COVID-19’s impact on Employment Rate in Pakistan:

COVID-19 will substantially affect those who are ‘vulnerably employed’ which account for 56% (52% among males and 71% among females) of the total employment.[1] Vulnerable employment is measured as the proportion of own-account workers (also including the daily wage earners) and unpaid family workers in total employment. Among this vulnerable employment, 0.21 million people become unemployed (low impact scenario) whereas 0.62 million become unemployed (high impact scenario) from a base of 3.86 million in 2019.

[1] PIDE COVID-19 E-BOOK

An overall picture of COVID-19 on Economic Sector The outbreak of Corona virus has posed significant challenges for various economic sectors in terms of vulnerable employment. Domestically, restrictions on movement of people and goods within the country and on certain productive activities may also have adverse economic impacts.  Experts estimate that between 12.3 million and 18.5 million people in various sectors may lose their jobs. The most hit sectors such as wholesale and retail trade (5.9 million out of 6.5 vulnerable employment), agriculture (6.4 million out of 12.8 million vulnerable employment), manufacturing (1.5 million out of 2.2 million vulnerable employment), and transport and communication (2.0 million out of 2.0 million vulnerable employment) can be facing higher lay-offs (facing lose jobs who are vulnerably employed) depending on low to higher impact of COVID-19.[1]

[1] Sectoral Analysis of the Vulnerably Employed COVID-19 and the Pakistan’s Labour Market (PIDE COVID 19 Bulletin No.4)

Impact on Inflation rates:

After raising the policy rate to 13.25% at the beginning of FY2020, the central bank reduced it in 2 steps to 11% in March 2020 following the decline in global oil prices and sluggish demand under COVID-19. The central bank projected that Inflation rate decelerated further from 10.2% to 8.3% to take further policy action for managing inflation and boost economic activity.[1]

                             Data source: SBP Inflation Snapshot

Government initiatives in line with the economic challenges faced due to COVID-19:

The Pakistani government announced an economic relief package worth 900 billion rupees ($5.66 billion) in aid designed to help low-income families with direct cash transfers, food assistance, and employment aid to farmers, and health insurance.[2]  It includes 200 billion rupees ($1.25 billion) for low-income groups, particularly laborers, 280 billion rupees ($1.76 billion) for wheat procurement, apart from a significant reduction in petroleum prices.

[1] https://nation.com.pk/04-Apr-2020/pakistan-s-economic-growth-to-slow-down-due-to-covid-19-outbreak-adb

[2] https://www.aa.com.tr/en/asia-pacific/covid-19-pakistan-unveils-economic-relief-package/1777961

The post Impact of COVID-19 on Pakistan’s Economy appeared first on Apex Consulting - Leading Consultancy Firm in Pakistan.

Since 2002, APEX Consulting Pakistan (APEX) has been providing policy, research, surveys, consulting and Monitoring and Evaluation (M&E) services to the social and corporate sectors. APEX now maintains five permanent offices across Pakistan in Islamabad, Karachi, Lahore, Quetta, and Peshawar. In 2009 APEX Consulting International, Inc. in Canada and in 2018 APEX Consulting in Afghanistan was registered as the international consulting arms of APEX. For more information, please visit our website and detailed profile.

Survey Methodology

The survey was conducted with randomly selected citizens from four provinces of Pakistan including Islamabad, AJK, and GB. The objective of survey was to estimate level of knowledge and practice of preventive measures from COVID-19, to know impact of lockdown on livelihood and food availability, to know citizens’ needs, and to gauge satisfaction about performance of government; and to know about citizens’ perception for initiatives by the government to combat with COVID-19 and wellbeing of residents of Pakistan.

Keeping in view the pandemic situation of COVID-19, the survey was conducted with randomly selected respondents telephonically. A total of 272 persons attended phone call and among these interviews were completed with 212 citizens of 18 years and above  – 30-31 each from Punjab, Sindh, KP, Balochistan, Islamabad, AJK and GB. The survey was conducted on Friday Apr 3, 2020.

Survey Respondents’ Profile

Among 212 respondents, 137 were from rural and 75 from urban areas, mostly were head of the household (203 males and only 9 females). They were distributed among various education levels i.e. 16% not educated, 12% primary or below, 16% middle, 24% matric, 11% intermediate, 11% graduate, and 9% master or above. The main source of income of the respondents’ household was daily wage earner (40%) followed by private job (24%), public/government job 19% and own business (17%). The survey also collected data of income of respondents’ household. The results informed that majority (39%) of the households’ income was between “10,001-20,000PKR”, followed by “below 10,000PKR” (25%), “20,001-30,000PKR” (20%) and “above 30,000PKR” (16%).

Survey Results

Fair usage Policy of COVID-19 Survey Results

The survey has been conducted by APEX fulfilling its Corporate Social Responsibility (CSR) practices.

Results of this survey are sole and exclusive property of APEX.

The results are for cascading general information only and are not intended to co-relate with the conduct of anyone else.

We do not support using results of the survey for designing any business or prediction model regarding COVID-19 and its impacts.

APEX does not endorse and has no responsibility for the accuracy or result of any predictive model that incorporates these results.

While acknowledging the ownership of APEX Consulting Pakistan, the survey results may be used for further information sharing and reference points purpose only in internal reports, documentation of organizations/departments, print and electronic media news, etc.

If you have queries in lieu of requiring similar or related services of APEX Consulting, we can be reached at bd@apexconsulting.biz or phone number +92 (51) 843-7529 & 30.

In order to gaze upon results by province, region, education level, Income level, occupation feel free to write us at mudabbir.haneef@apexconsulting.biz.

Download

Download Full Report pdf version

The post KAP and Perception Survey on COVID-19 with Citizens of Pakistan appeared first on Apex Consulting - Leading Consultancy Firm in Pakistan.