PTI government with its subtle agendas and efforts to improve the economy, is now head to head with another challenge. The rate at which the COVID19 is spreading throughout Pakistan is suspected to be faster than other developed nations, more is required from the government to thwart the issues emerging from the global calamity.
One such issue that Pakistan is confronted with is the cost it would pay because of the outbreak of the virus. Despite having its balance of trade in the right direction now the pace of development is under jeopardy. Asian Development Bank (ADB) stated in its report that the virus outbreak could cost the Pakistan economy in the range of $16.387 million to $4.95 billion, or 0.01 % to 1.57% of Gross Domestic Product (GDP). United Nations (UN) estimates international tourism to drop 3% due to virus resulting a loss up to $50 Billion globally, is another bad news for the government which is committed to increase tourism exports.
According to an official statement, the World Bank would provide $238 million and the ADB $350 million to Pakistan in support for the COVID-19 emergency response and to address the socio-economic disruption associated with it.
In the measure being taken by Pakistan, PM Imran Khan has requested the concerned departments to control inflation, encourage the business activity by providing the ease of business-related essentials. Efforts like leverage on utility bills and allowing certain departments to still stay active while there’s being a lockdown observed.
PM has hinted business community for decrease in interest rate which is the need of the day for allowing businesses to borrow funds on lesser finance cost especially when the virus fear has increased the input cost of supplies as China shut down.
Pakistan is all set to get benefit from EU GSP plus status specially in the field of Textile where the orders towards Pakistan increasing while China is partially shut down. Besides GSP status from Europe after Brexit, United Kingdom (UK) signaled to double its trade with Pakistan on back of improved security situation of the country. Good news is that the virus impact on China Pakistan Economic Corridor (CPEC) activities will be negligible as stated by Pakistan’s envoy to China.
The government is determent to increase the business activity in the country despite the fear of devastation of economy from the virus, Pakistan is making measures to sustain its economy. Different officials have been given the task to establish special economic zones to benefit the economy and facilitate the business community with favorable environment to increase economic activity.
On the economic front, Pakistan remained a significant beneficiary of the benefits availed by 9 GSP Plus beneficiary countries. Out of total export of 6.739 Billion Euros of Pakistan to EU in 2018, our exports worth 5.885 Billion Euro availed tariff concessions. Since the grant of GSP Plus in 2014, Pakistan’s exports to the European Union have enhanced from 4.538 Billion Euros in 2013 to 7.492 Billion Euros in 2019, registering an increase of 65% mostly in Textile sector.