KARACHI: An increase in the time span of measures taken to curtail the Covid-19 pandemic spread in Pakistan will severely impact the economy, the State Bank of Pakistan (SBP) said in a recently released video.
In the short, two-minute video titled “How could Covid-19 impact Pakistan economy moving forward?”, the SBP said that the impact of Covid-19 can be likened to any other calamity, in the sense that there is a sudden disruption followed by a wave of reconstruction and recovery, and then normalcy.
However, the SBP noted, “The difference is the disruption caused by Covid-19 is more widespread and prolonged.”
Instead, due the disruption caused by Covid-19, shopping malls and restaurants have remained closed or severely curtailed, and all economic activity has been scaled down.
“Uncertainties also abound over the time when the lockdown would stay in place. The longer the measures are in place, the more the severe the impact will be on the economy.” the SBP claimed.
In the explainer video, the SBO went on to paint two different scenarios. In the first case, Pakistan manages to flatten the Covid-19 curve early and reverses containment measure gently.
This allowed for an early supply-side recovery, where manufacturers, transporters, and retailers can reposition themselves and make “all-out efforts” to compensate for any earlier losses.
Even if domestic demand remains suppressed (as higher unemployment and weak consumer confidence might weigh in), recovery can be managed with growth-inducing economic policies.
But in the second case, the domestic spread is unable to be curtailed, and instead accelerates. In this dire picture, health care facilities are stretched to the maximum, and lockdowns strictly tightened.
“This will suppress economic activity and potentially create an existential threat to micro and small business,” the SBP said.
In this case, funds will be spent on healthcare and vulnerable households, while overall economic policies will be fixated on business survival than growth. The video is part of a series of six short videos on the Covid-19 pandemic in Pakistan that the SBP released on its official Youtube page within the last week. The videos include Covid-19’s impact on the economy, the economy’s vulnerability, and how Pakistan is responding to the pandemic.
Mostly, the videos are an attempt to distil already available SBP information on the pandemic in digestible video format.
In recent months, the SBP has made an active effort to maintain a presence on Youtube this year. For instance, it not only regularly uploads filmed discussions, but also pre-recorded videos featuring the SBP Governor Reza Baqir, often explaining the SBP’s latest monetary announcement.
