The economy of Pakistan is facing downside risks due to the extended COVID-19 lockdown, said the central bank on Sunday.
According to the central bank of Pakistan, the economy has been badly affected by lockdown and there is a high risk of increasing poverty across the country. On Sunday, they said that lockdown is negatively effecting high consumption rates, multidimensional poverty, and informality in job markets.
Talking about poverty, the State bank of Pakistan said that there are 4 out of 10 people in Pakistan who face multidimensional poverty, it increases the risk of foods and social security due to extending of lockdown scenario and that Pakistan’s economy is highly vulnerable in the face of coronavirus.
The country remained in both stricter and eased down extended lockdown for more than 3 months after the outbreak in March. The government of Pakistan will decide today the state of lockdown in the country as the previous lockdown was till 31st May. The restriction and strictness in lockdown for containing COVID-19 have gravely disturbed the economic activities.
Moreover, SBP said that the government of Pakistan is not spending enough on education and health and is relatively low as compared to regional countries because a strong health care system and a satisfactory level of awareness among people is necessary for this current critical situation. The government began efforts to alleviate the economy long before the pandemic broke out. It resulted in improved external sector performance, recovered trade fiscal deficit, build reserves, exports got decreased and Pakistan became able to get more foreign exchange.
SBP further said, “All this means that business confidence is increasing and the country is experiencing a healthy inflow of foreign investment. Indeed, after this stabilization period, the economy is starting to show green shoots of recovery. That is good news. Pakistan’s fundamentals were much better before Covid-19 hit the global economy and Pakistan recovered after the pandemic eased”.
Image source link