At the end of last year, Pakistan had high hopes in a better economic growth during 2020. Prime Minister Imran Khan reportedly said that with 2019 being the year of difficulties and economic stabilisation, 2020 would prove as the year of economic development for Pakistan. The premier said: “During the year 2020, the focus will be on economic growth, job creation, poverty reduction and the uplift of poor through Ehsaas programme,” while addressing the launch ceremony of Pakistan Post initiative, on 24 December 2019, for delivery of remittances by overseas Pakistanis through 500 designated post offices in various cities.

Unfortunately, things did not go as per the plan. Following the rapid spread of the novel coronavirus in the nation of nearly 221 inhabitants, neither the economy grew nor remittances arrived from abroad. In this regard, the Asian Development Bank (ADB) issues a special report about the impact of COVID-19 on Asian countries. It stated that the virus outbreak could cost Pakistan’s economy in the range of USD 16.387 million to USD 4.95 billion, or 0.01% to 1.57% of GDP. The report also highlighted that this loss would plunge Pakistan's GDP by at least 1.57% and trigger 946,000 job losses.

Prior to the wide-spread of the novel coronavirus pandemic, Prime Minister

Imran Khan stated that Pakistan is moving on the road to development with

the stablerupee, growing exports, adequate power supply and accelerated

development spending leading the country in the right direction.

In fact, Pakistan’s balance of trade over the period between July 2019 and February 2020 has improved by 26% according to the Pakistan Bureau of Statistics. Exports recorded a growth of 3.65% from USD 15.1 billion to USD 15.65 billion whereas imports declined 14.06% from USD 36.56 billion to USD 31.42 billion during the same period. It means the country's balance of payment improved by 14.61% as of February 2020. However, all these achievements started to erode and the positive projections have been revised as the number of COVID-19 cases started to surge in the South Asian country in the middle of March.

The Pakistan Institute of Development Economics (PIDE), the authority assigned to come up with estimates of COVID-19 losses on account of GDP growth, presented three different scenarios. The PIDE estimated that in the first scenario when there is only a two percent decline in imports, the overall loss to the GDP would be negligible. In the second scenario, a 10 percent decline in the intermediate and capital goods in addition to a similar reduction in exports would result in a loss of 2.3 per cent of GDP in the fourth quarter of the financial year 2020. Also, that would likely bring a big fall in investment. The third scenario estimated that a 20 per cent decline in trade activities (export and import) would lead to loss amounting to 4.6 per cent of GDP.

What increases the risk experienced by Pakistan’s economy is the fact that some of its major trade partners have been among the worst-hit by the pandemic. This includes China, the USA, the UK and Germany. The deteriorating trade activities in these countries affect Pakistan’s economy directly through the decline in the country's bilateral with each of them and indirectly, through the impacts affecting other countries that Pakistan has trade relationships with. Although the analysis by the PIDE only considered Pakistan’s international trade relationships, the impact on domestic trade activities could further worsen the economic growth figures.

For example, Pakistan has now become a market for about 50 million domestic tourists who travel mostly in personal cars with families and in groups of an average of five people. In 2018, statistical reports showed that the four most visited destinations of Pakistan’s Khyber Pakhtunkhwa province recorded five million tourists. These sites employ 8,665 workers and contribute about USD 5 million to the local economy through tourism receipts. This year, more tourists were expected for Eid-ul-Fitr who might want to stay a little longer since summer school holidays are supposed to begin around the Eid. This is less likely to happen as the country is the pandemic is spreading across the country.

 Until the end of February, Pakistan had only four COVID-19 confirmed cases. Since then, the number of new cases increased at an average daily rate of 18.43% to reach 13,328 as of 26 April. The death toll rose from 26 at the end of March to 281 as of 26 April with a fatality rate of 2.11% which is lower the OIC rate of 3.66% and the global rate of 6.91% on the same day. A total of 2,936 of COVID-19 patients recovered as of 26 April, which represents about 22 per cent of all confirmed cases in the country since the pandemic reached it on 26 February 2020. Despite the tragic effects of COVID-19, Pakistan hopes to recover and leverage the economic stability achieved over the past few years.