At least 10 million more Pakistanis will drop below the poverty line because of the toll of the COVID-19 pandemic, the government’s new economic survey estimates.
Around one in four Pakistanis are currently too poor to meet basic needs, but the figure is predicted to rise closer to 30 per cent of the world’s sixth most populous nation.
“The COVID-19 outbreak is expected to have a negative impact on Pakistan’s economy, and the number of people living below the poverty line may rise from the existing figure of 50 to 60 million,” the survey says.
The government’s annual Economic Survey also warned that the economy would contract for the first time in 68 years.
“The country’s provisional gross domestic product (GDP) growth rate will likely contract 0.4 per cent instead of growing 3.3 per cent as previously forecast,” Adviser to Prime Minister (PM) on Finance Abdul Hafeez Shaikh told a news conference.
The adviser said the International Monetary Fund (IMF) and World Bank (WB) were making bleaker assumptions keeping in view the severity and duration of the coronavirus pandemic. “In my view, we will have a better estimation when this year ends on June 30.”
He highlighted the government’s swift and decisive policy actions since the start of the current fiscal year, including resource mobilisation, completion of the IMF programme, austerity measures and monetary policies helping stabilise the economy.
The adviser stated that these measures helped the economy to reverse large external and internal imbalances. He said that significant improvement in external accounts was made as the current account and trade deficit witnessed a substantial contraction.
“Foreign reserves steadily improved. There was an increase in foreign direct investment (FDI). The credit rating profile also improved. Fiscal performance remained strong during the first three quarters of the outgoing fiscal year, on the back of consolidation efforts and targeted reforms.”
“To mitigate the socio-economic impact of the pandemic, the government announced a stimulus package of Rs1.24 trillion and offered further relief measures through the State Bank of Pakistan (SBP). The policy rate was also cut by 5.25pc to 8.0pc,” he said, adding that monetary and fiscal policy interventions had been made to restore economic activity in this difficult time and to reduce negative effects on poverty and unemployment.