After the initial difficulties, Pakistan appears to be managing well to contain the spread of the coronavirus. According to The Economist, Islamabad is even doing better than its historical enemy, India, at managing the pandemic. Whereas India’s burden is still rising by 70,000 new cases a day, Pakistan’s caseload seems to have peaked three months ago. Its daily total of new cases has remained in the mere hundreds since early August.
From the beginning of the pandemic, India registered 6,312,584 coronavirus cases and 98,708 deaths, 2,317 new cases only yesterday.According to the World Health Organization (WHO), Pakistan recorded only 6 deaths out of 694 confirmed cases against 36,468 tests in the last 24 hours. With the exception of large indoor gatherings, the country lifted social and commercial lockdown. Educational institutions have opened in a progressive manner with SOPs in place. Today Islamabad started also to lift restrictions while traveling by train and airlines. However, strict SOPs will be imposed.
The COVID-19 numbers are showing a slowdown, hit cannot be translated as the pandemic having reached a peak. Screening at the airports, obligatory masks in public places and ban on large indoor social gatherings is still imposed. Unlike India, the Pakistani government has started to implement “micro-smart lockdown” strategy, under which very small localities like buildings with multiple housing units and street level areas with more than 2 positive cases will be targeted instead of entire areas.
India’s economy has also fared far worse.The Asian Development Bank predicts that its GDP will shrink by fully 9% in the current fiscal year, compared with a contraction of 0.4% for Pakistan.In support of very small business and low-income individuals, the State Bank of Pakistan (SBP) has enhanced the limit for housing finance and microenterprise loans to PKR 3 million from the existing PKR 1 million for borrowing from microfinance banks.A significant slowdown in the spread of Covid-19 has encouraged some local business sectors to prepare for a restart by increasing borrowing.
While India is unable to reopen due to the exponential increase in COVID infections, the hotel industry in Pakistan has increased borrowing by over 40% in the past two months. The outstanding borrowing by pharmaceutical manufacturers in August 2020 stood at PKR 73 Billion compared to PKR 61 Billion in August 2019. In the same manner, borrowing by motorcycle manufactures increased by 12.30% to reach PKR 9.35 Billion in the same period.The State Bank of Pakistan has also eased the 100% cash margin requirement for import of certain raw materials to support manufacturing and industrial sectors and to enhance their capacity to contribute to the post-COVID-19 economic recovery.
Islamabad has announced to have contained budget deficit at PKR 440 Billion or less than 1% of the size of the economy (GDP) during the first two months of the current fiscal. The total difference between expenditures and receipts was almost 12% less than the same period of the last fiscal. However, the improvement mainly due nearly 70% increase in non-tax revenue (higher petroleum levy rates).According to the Association of Pakistan Motorcycle Assemblers the 1st quarter of a higher production of two-wheelers and is expected to reach a record figure of 800.000 units by the end of the 1st quarter of the current fiscal year.