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March 27, 2020

Harrowing economic fallout of COVID-19 in Pakistan: People below poverty line may double to 125 million

National

March 27, 2020

ISLAMABAD: The lingering pandemic COVID-19 is expected to have far reaching negative impact for Pakistan’s economy as the number of people living below the poverty line might get doubled going up to 125 million from existing figure of 50 to 60 million.

This starting disclosure was shared with international donors during high-level meeting convened by Deputy Chairman Planning Commission Mohammad Jehanzeb Khan here at Planning Commission on Thursday afternoon.

It has been decided that the negative impact of COVID-19 on Pakistan’s GDP growth would be estimated and the Pakistan Institute of Development Economics was assigned to come up with estimated figures on this subject.

The official sources confirmed to The News after the meeting that Dr Nadeem Ul Haq, Vice Chancellor Pakistan Institute of Development Economics (PIDE), think tank of Planning Commission, stated that the number of unemployed because of COVID-19 might be standing at 19 to 20 million.

About prevalence of poverty, he said that Pakistan’s 50 to 60 million people were already below the poverty line and the figure was expected to touch 125 million due to the COVID-19, while 19 to 20 million were expected to lose their jobs.

The international donors’ representatives asked the government about assessment on two issues including what will be the long term impact on supply chain and second what will be the impact on labor market especially daily wagers and street vendors?

It was also feared during the meeting that some cases were recently reported from rural parts of Islamabad Capital Territory (ICT) and other parts of the country. Now the harvesting season of wheat is approaching and there were increasing apprehensions that the ongoing pandemic might affect rural population very negatively.

During the meeting the representatives of different ministries, divisions and departments gave their respective update about the losses caused by COVID-19 Virus as the FBR estimated that the buoyancy in taxes would be affected negatively and the FBR might have to face further revenue loss in the range of Rs 300 billion to Rs 380 billion from March to June 2020. The FBR had already faced massive revenue shortfall so far as the target was already revised downward from Rs 5.555 trillion to Rs 5.238 trillion. The government had already requested to the IMF to slash down the target to Rs 4.8 trillion. With fresh assessment in the wake of COVID-19 Virus and in case of locked down for three and half months period then the FBR would be able to collect around Rs 4.4 trillion maximum. The FBR told during the meeting the POL consumption dropped massively in the aftermath of lock down in different parts of the country and it is affecting the revenue collection negatively. “Its unfolding and evolving situation so the exact estimates on revenue front will be hard to assess accurately” the sources quoted the FBR’s representative as saying during the meeting.

The representatives of ministries, divisions and departments asked for placing mitigation plan as early as possible to cope with arising out challenges.

The Planning Commission asked the ministries and divisions to come up with required information on one sample format so that the information could be translated into policy action. Such format would also help the policy makers to track down and monitor the policy interventions.