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    Assignment N1 Economic Impact of COVID-19-1

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    Assignment N1 Economic Impact of COVID-19-1

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    naazbadshah1
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    Assignment^N1 Economic Impact of COVID-19-1

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    9 views5 pages

    Assignment N1 Economic Impact of COVID-19-1

    Uploaded by

    naazbadshah1

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Impact of COVID-19 on Pakistan’s GDP and industries

    Submitted to: Madam Nimra gull


    Submitted by: Muhammad Abbas
    Semester: BS.1st
    Roll no: 305-241045

     INTRODUCTION:-
    The COVID-19 pandemic created one of the
    most profound disruptions in modern economic history, shaking
    economies worldwide. Pakistan was no exception. The virus forced
    industries to shut down, slowed trade, and disrupted daily life,
    leading to severe economic consequences. Pakistan’s GDP, which
    had been growing steadily, shrank for the first time in decades. The
    service, tourism, and manufacturing industries took a hard hit,
    causing unemployment and uncertainty-

    However, alongside these challenges, the crisis also opened new


    avenues for growth in certain areas like e-commerce, healthcare,
    and technology. Pakistan had to respond creatively to survive the
    crisis, with both the government and the private sector adopting
    innovative solutions. This assignment explores the negative and
    positive impacts of COVID-19 on Pakistan’s economy and suggests
    how we can overcome the challenges-

     Impact of COVID-19 on pakistan GDP:-


    The pandemic disrupted
    Pakistan’s economy in 2020, leading to the first economic
    contraction in 68 years, with GDP shrinking by 0.94%. Before COVID-
    19, Pakistan’s economy had been projected t” grow by 2.4%. The
    service and industrial sectors, which contribute significantly to the
    country’s GDP, were hit the hardest due to lockdowns and
    restrictions. Many businesses closed down, supply chains broke, and
    global demand for Pakistani exports fell.

    International trade and remittances, which play a key role in


    supporting Pakistan’s economy, also saw a decline. However, by
    2021-2022, the economy showed signs of recovery with a growth
    rate of around 6%. The government’s quick interventions, such as
    financial stimulus packages and tax relief programs, played a role in
    stabilizing the economy. Yet, the overall recovery remains fragile,
    with inflation, unemployment, and rising debt still posing significant
    risks

     Negative impacts:-

    1. GDP Contraction:

    GROWTH RATE:-
    Pakistan's GDP contracted significantly due to lockdowns and reduced economic activity. The growth rate fell
    from around 1.9% in 2019 to approximately
    -0.4% in 2020.
    Sectoral Impact: Key sectors such as manufacturing, services, and agriculture faced disruptions, leading to
    decreased output

    2:- UNEMPLOYMENT
    Job losses: Many businesses, especially in hospitality, tourism, and retail, had to close or
    downsize, resulting in widespread job losses.

    Informal Sector::A large portion of the workforce is in the informal sector,


    which was severely affected, leading to increased poverty levels.
    Supply Chain Disruptions:
    3:- Supply Chain Disruptions:
    Improts and Exports:: Restrictions on trade and transportation affected supply chains, leading
    to shortages of raw materials and finished goods.

    Market access : Export-oriented industries faced challenges in accessing international markets due to global
    restrictions.
    4:- Inflation:-
    Price increases:Disruptions in supply chains and increased demand for
    certain goods led to inflation, further straining household budgets.

    POSITIVE IMPACT

    1:- Digital Transformation:-


    E-commerce Growth:: The pandemic accelerated the adoption of digital platforms for
    business, leading to growth in e-commerce and online services.

    Remot work:- Many companies adopted remote work policies, which may lead to long-term changes in work culture
    and productivity.

    Health Sector improvement:


    Investment in Health Infrastructure:
    The crisis highlighted the need for better healthcare facilities, prompting increased investment in the health
    sector.
    Addressing Challenges:
    To mitigate the negative impacts and build resilience, Pakistan can consider the following strategies:
    1:-Economic stimulus:
    Government Support:-Implementing fiscal measures to support businesses and individuals, such as cash transfers
    and tex relief
    Investment Challenges:
    Accelerating infrastructure projects to create jobs and stimulate economic activity.
    2:- Support Affected iNdustries:-
    Targeted Assistance: Providing financial aid and support to the most affected sectors, such as tourism and
    manufacturing.
    Skill Development:-: Offering training programs to help workers transition to new industries or roles.
    3:-Enhancing Digital Infrastructure:
    promoting E-Commerce;- Encouraging businesses to adopt digital solutions and improving internet
    access, especially in rural areas.

    Impact of COVID-19 on Pakistan’s GDP

    The pandemic disrupted Pakistan’s economy in 2020, leading to the


    first economic contraction in 68 years, with GDP shrinking by 0.94%.
    Before COVID-19, Pakistan’s economy had been projected t” grow
    by 2.4%. The service and industrial sectors, which contribute
    significantly to the country’s GDP, were hit the hardest due to
    lockdowns and restrictions. Many businesses closed down, supply
    chains broke, and global demand for Pakistani exports fell.

    International trade and remittances, which play a key role in


    supporting Pakistan’s economy, also saw a decline. However, by
    2021-2022, the economy showed signs of recovery with a growth
    rate of around 6%. The government’s quick interventions, such as
    financial stimulus packages and tax relief programs, played a role in
    stabilizing the economy. Yet, the overall recovery remains fragile,
    with inflation, unemployment, and rising debt still posing significant
    risks.

    Impact on Key Industries

    1. Manufacturing and Textile Industry

    The manufacturing sector, especially textile production, which


    accounts for a large share of exports, was severely impacted. Global
    lockdowns reduced demand for Pakistani textiles, leading to a
    decline in exports. Additionally, disruptions in the supply chain
    delayed the arrival of raw materials, further slowing down
    production. Many factories operated at reduced capacity, and some
    workers lost their jobs.
    However, as the global economy started to reopen, demand for
    textile products surged. Pakistan’s textile industry saw a bounce-
    back in exports, and the government introduced duty exemptions
    and loans to help industries recover.

    2. Tourism and Hospitality Sector

    The tourism and hospitality sector was one of the worst-hit


    industries. Travel restrictions and the closure of hotels, restaurants,
    and tourist attractions caused a sharp decline in revenues. Major
    tourist destinations such as Hunza, Swat, and Murree saw fewer
    visitors, affecting small businesses that rely on tourism.
    The government is now focusing on domestic tourism and plans to
    promote travel once the pandemic stabilizes. Efforts like soft loans
    for the tourism sector and marketing campaigns are being used to
    encourage recovery.

    3. Retail and E-commerce

    Traditional retail businesses faced significant losses due to


    lockdowns, but e-commerce and online delivery services
    experienced a boom. Many consumers switched to online shopping,
    which accelerated the growth of platforms like Darazand other
    delivery services. This shift has created new job opportunities,
    especially for logistics and tech-related businesses. However, many
    small retailers who could not adapt to digital platforms struggled or
    shut down.

    4. Health and Pharmaceutical Industry

    The healthcare sector faced immense pressure during the


    pandemic. Hospitals struggled to manage the influx of COVID-19
    patients, and the government had to increase healthcare spending
    to build emergency facilities and procure medical equipment. On the
    positive side, the pandemic boosted the pharmaceutical industry
    and created opportunities for local manufacturers of sanitizers,
    masks, and personal protective equipment (PPE). This has laid the
    foundation for a more resilient healthcare system in the long run.

    5. Education and Technology Sector


    Schools, colleges, and universities were forced to switch to online
    learning, leading to a rapid adoption of ed-tech platforms. This
    transition was difficult, especially for students from rural areas with
    limited access to the internet. However, it also spurred the growth of
    digital education tools and opened up new opportunities for
    freelancers and tech startups. Platforms like Zoom and Google
    Classroom became essential tools for learning.

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