Corona Crisis: Pakistan’s Growth Rate To Be In Negative For The First Time In 7 Decades
In nearly seven decades, the growth rate of Pakistan is expected to be in negative for the very first time. Ministry of Finance on Tuesday said that due to the coronavirus lockdown, the country’s economy is expected to post a negative growth rate of about 1.6% this fiscal year.
According to a news report published in The Express Tribune, the Finance Ministry in a statement issued after a meeting chaired by Adviser to PM on Finance and Revenue Dr Hafeez Shaikh, said: “In the worst-case scenario, the growth rate could remain negative, at -1.57 per cent of GDP.” The statement suggested that Pakistan would fall into recession for the first time in 68 years. Last time, the economy had contracted in fiscal year 1951-52.
The ministry warned against relaxing the ongoing lockdown in the country, which is in its sixth week. It cautioned that this could increase the infection rate and put unbearable burden on the already exhausted health system. It emphasised that the second tranche of cash grants to those affected by the lockdown and closure of businesses, would be required to further the relief efforts.
“It was also felt that there would be negative growth throughout 2020 and the chances of recovery were expected from the start of 2021”, according to the statement. The high-level meeting underlined several challenges the country was likely to face on the economic front due to the impact of Covid-19 on the national, regional and global economy.
According to the International Monetary Fund (IMF), the world economy would contract by 3% this year – the most severe downturn since the Great Depression in 1930s. The situation could get much worse if the pandemic lingers into the second half of the year or resurges.
The National Coordination Committee has extended the lockdown till May 8 and there were chances of further increase in the lockdown period. The confirmed coronavirus cases in Pakistan had topped 14,500 as of Tuesday.