The Government of Pakistan’s foremost duty at the moment should be to allay two foremost fears of the public: there would be no food shortage; and inflation would be contained. Rumors are rife vis-à-vis the impending paucity of edible items and sky high inflation in the wake of the closure of the industry and the job losses. The nation seems to be in dilemma. There must be a categorical assurance by the authorities to the masses that prudent and stern steps have been taken by the government to ensure smooth availability of the edible items and there is no likelihood of scarcity of food items throughout the country. Moreover, there is an unwarranted fear about the impending inflationary pressures, which has engulfed the entire nation. These fears were compounded when the IMF Chief Kristalina Georgieva declared that the world has already entered recession. On top of that the abysmal growth of the Chinese economy at 1.2 percent this year has aggravated the situation. $2.2 trillion economic package approved by the US Senate to tackle the abrupt drop in the economic activities indicates that the world is facing unprecedented economic crisis not witnessed even during 2008 sub-prime crisis or even during the Great Depression. Simultaneously, there is hope prevailing across the globe that the situation is going to turn around and everything is going to get back to normality in the not-too-distant future.
There is no denying that the global economy is going to contract by 3 percent during this year by virtue of the pandemic. Asia’s economy would experience zero growth during this year. Pakistan’s sagging economy is expected to contract by 1.5 percent. It would be a gigantic jolt to the already fragile economy.
The foremost worry of the Pakistanis might be inflation at 11 percent this year at a time when there is unemployment and the closure of industry for certain time period. The government has taken certain steps to ensure that customers are not being overcharged, however, inflation exists unabated. The people have been paying 20 to 30 percent more at various grocery stores with some complaints about the non-availability of myriads of items. Prices of lentils have witnessed spike in prices and the relevant authorities seem to be enjoying sound slumber at the expense of the poor segment of the society. Rice and flour prices have been hiked on the pretext of paucity and non-availability of transportation. The only relief, which is being enjoyed is the low prices of vegetables at the expense of the farmers. However, there is a fear of the spike in the prices of the vegetables in the days to come for which the government must take pre-emptive action to stave off the inflationary pressures, which might compel the poor to kneel down and commencing begging.
Two-third of the economy of Pakistan depends on the services sector which is also one of the leading employers since there was movement of jobs from agriculture and to some extent from manufacturing to service industries some time back. Services sector plays a vital role in the economic growth of Pakistan. Job losses particularly in the services sector during the pandemic have massive impact on the lives of millions of Pakistanis. These individuals have been rendered jobless overnight and ample uncertainty about the resumption of the services at full throttle has aggravated the situation.
The disbursement of Rs12000/- to the deserving families during pandemic has played a vital role at the moment however it could be termed only a drop in the ocean in the given circumstances.
The government is going to face monumental decline in its anticipated revenue, exports etc. On the contrary whopping unprecedented expenses of the government in tackling the pandemic are going to prove detrimental to the debt-laden economy of Pakistan at least for next two years. These are trying times for the government and for the entire nation, however, the government must perform its duty of easy availability of the essential items to the masses at right prices and the hoarders must be given exemplary punishment.
The budget for the next fiscal year would be a tough ask. It is to be seen that how much amount the government allocates for the social safety programs for the next fiscal year. And, the COVID-19 might haunt the economy of Pakistan in the next fiscal year impacting the growth to a wide margin.