Pakistan’s economy faces the worst blow from the coronavirus pandemic outbreak

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Pakistan’s economy faces the worst blow from the coronavirus pandemic outbreak

ISLAMABAD: *Pakistan’s economy face the worst blow from the coronavirus pandemic outbreak.*

Pakistan’s fiscal deficit will surge to 9pc in the ongoing fiscal year, the country’s de facto finance minister said, as its economy reels from the fallout of the coronavirus crisis.

Pakistan, which has reported 26,435 confirmed cases of COVID-19 and 599 deaths, had announced lifting countrywide lockdown from Saturday in a bid to restart economic activity.

Fear of an economic meltdown is said to be the main reason behind ending the shutdown at a time when the country’s curve, or rate of infections, is edging up sharply.

“The expectation of the deficit we had prior to the coronavirus was 7.6pc. Now, after corona, we think the deficit will touch 8pc plus and that it might be 9pc,” said Abdul Hafeez Shaikh, Adviser to Prime Minister on Finance and Revenue, who is effectively the country’s finance minister.

In an interview with Reuters at his office in Islamabad, Shaikh said the coronavirus-hit South Asian economy will also miss a tax revenue target that had recently been downwardly-revised and agreed to with the IMF, which gave the country a three-year, $6 billion bailout last year.

Pakistan is set to collect Rs3.9 trillion ($24.54 billion) in taxes, 19pc below the downwardly revised target of Rs4.8 trillion ($30.20 billion), he said.

The International Monetary Fund also gave Pakistan a $1.386 billion rapid financing package last month to tackle balance-of-payment problems amid economic fallout from the virus.

The country’s economy is now projected to contract 1pc to 1.5pc in the ongoing fiscal year, Shaikh added, officially corroborating earlier IMF estimates of the extent of the effect of the pandemic on Pakistan’s economy.