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IMF warns of coronavirus negative impact on Pakistan’s economy

IMF warns of coronavirus negative impact on Pakistan’s economy

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The IMF mission has expressed concerns over coronavirus impact on Pakistan’s economy as spillover effect of slowing down of Chinese economy might negatively affect Islamabad’s GDP growth endeavours for the current fiscal year.

However, Pakistani authorities rejected any negative impact on its economy in totality and argued that there would be no negative impact so the GDP growth target of 3.3 percent and inflation hovering around 11 to 12 percent must remain intact. 

How will coronavirus impact Pakistan’s economy?

China’s economic size stood at over $14 trillion having 16 percent share in global economy. The Wuhan, the capital of Hubei province, that remained the worst hit area of coronavirus, possessed around 4.5 percent share in China’s overall GDP growth with contribution of industry 46 percent, service 43 percent and agriculture 11 percent. Now Pakistan’s share of export to China stood at $937 million or 7.6 percent while import from China was $4.9 billion (22.0 percent) during July-December period of the current financial year 2020. The major exports to China included food $216 million or 23.1 percent, raw material (7.1 percent; 67 million) and Textile (59.9 percent; $561 million).

The impact on Pak economy dependent on time length of handling coronavirus and its intensity of spreading in surroundings.

The import from China has already slowdown traditionally during severe winter season every year because the government closed down the Pak-China border on Nov 30 and opened on 1st week of April, because heavy snow made transportation impossible, so slow down in China will not negatively impact Pakistan immediately as traders have sufficient stocks of Chinese products, if the impact continues after April.

Our textile industry and exports may increase as Hubei’s textile is going to slow down and our textile industry may get more orders from global market.

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