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Tuesday, July 16, 2024

How is Coronavirus outbreak affecting Pakistan’s economy?

Coronavirus has jolted Pakistan’s tattering economy. But experts believe that the worse is yet to show its deadly form. How is the COVID-19 outbreak affecting Pakistan’s economy under the leadership of Prime Minister Imran Khan?

As Coronavirus is hitting hard the economies across the world, Pakistan is also expected to experience the worst economic crisis in the country. Due to lockdown, health system has become overturned and the economy a second priority. In the latest reports, it has been learnt that passenger car sales witnessed another bad month as sales plunged by 71.8% to 5,796 units in March 2020, as compared to the same period last year, amid the coronavirus lockdown in the country.

Social scientists believe that the country is likely to face social chaos as a result of economic crisis. “People are running short of food now. There is no work for the daily wagers. There is nothing to earn,” said G-M Pitafi, professor of Politics and International Relations at UMT, Lahore.  He also feared that the street crimes may increase for people won’t have food and they will break both social norms and legal rules to fulfil their basic needs.

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According to data released by the Pakistan Automotive Manufacturers Association (PAMA), passenger car sales dropped by 71.8% to only 5,796 units in March 2020 from 19,897 units sold during the same period last year. The decline in March is the largest ever decline in any month’s sales.

Passenger car sales in the cumulative period (July-March) dropped by 46.8% to 85,330 units, compared to 160,359 units sold during the corresponding period last year. With an exception to Suzuki’s Alto, as it was not produced in March last year, all variants of four-wheelers and above recorded a decline in sales.

Indus Motor launched its new Toyota Yaris in 1.3 and 1.5 variants, but it could not attract sales, as the country went on lockdown soon after its launch. In March, sales of car variants of 1300cc and above dropped by 59.2% to 3,498 units only as compared to 8,576 units sold during the same month in the previous year.

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During July-March, sales of these cars dropped by 56% to 34,528 cars from 78,808 cars last year. Sale of Toyota Corolla decreased by 56% to 2,089 units against 4,741 units sold during March 2019, while the sale of Honda Civic and Honda City was also down by 61.5% to 1,327 cars from 3,449 units compared to the same period last year.

Suzuki Swift saw a decline of 78.7% to 82 cars sold from 386 cars sold last year. During this period, 1000cc cars, Suzuki Cultus and Suzuki WagonR, witnessed a drop in sales by 80.5% to 1,020 units against 5,235 units last year. Sales of under 800cc cars, despite Suzuki Alto’s off-take, dropped by 79% to 1,278 units in March against 6,086 units sold during the corresponding period last year.

Buses and trucks saw a decline of 40% in sales (July-March) to 3,265 units, from 5,428 units during the same period last year. Sale of jeeps decreased by 44.8% to 3,140 units during the period under review, from 5,688 units sold during July-March FY19.

Similarly, tractor sales also decreased by 37.7% to 23,506 units in the nine months of FY20, from 37,742 units sold during the corresponding period last year. Rickshaws and motorbike sales dropped by 12.3% to 1.17 million units in the period under review from 1.33 million units sold last year.

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Experts believe that both panic and widespread disease create some particular insecurities which do not allow people to spend money on anything other than their basic needs. At the same time, they maintain, the poor segment of the society is likely to oppose the existing order and lockdown since they don’t have anything to ensure their survival. It is yet to be seen whether the government’s efforts to address people’s grievances shall be addressed through Ehsas program or not.