WB warns Pakistan's exports will plunge if COVID-19 lasts longer than expected

ISLAMABAD: The World Bank has forecasted that if the coronavirus lasts longer than expected, Pakistan’s exports could plunge to negative growth of 19.7% in the current fiscal year (FY) 2019-20 as compared to the previous one.

The negative impact of global lockdown due to coronavirus would persist longer and could go beyond FY-20, said the World Bank in its twice-a-year-regional update ‘South Asia Economic Focus’ adding that under the baseline scenario, the growth rate of exports of Pakistan is likely to contract by 5.3% during the year 2020-21.

However, the World Bank has projected that the exports in 2021-22 would witness a positive growth of 7.3%.

The imports of goods and services are also likely to be contracted by 26.3% during the current year, while in the subsequent years of FY-21 and FY-22, the imports would witness a negative growth of 7.7% and positive growth of 4.8% respectively.

Services growth during the current FY is projected to contract by 1.7% while in the year 2020-21 it would grow by 0.8% and in FY-22 the sector would grow by 3.4%.

Similarly, the report forecast that the country’s industrial sector would contract by 2.1% in the current fiscal year while during FY 2020-21, the sector would grow by 0.7% and in 2021-22, it would grow by 3.7%.

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The agriculture sector’s growth would remain positive despite the negative impact of the lockdown and it is likely that the sector would grow at the rate of 1.0% during current year while in next two years its growth would gradually pick the pace to 1.7% in FY-21 and 2.3% in FY-22.

With respect to inflation, the report projected that by the end of current fiscal year, the inflation rate would remain at 11.8% while in the next years the rate would be recorded at 9.5% and 6.0% by the end of FY-21 and FY-22 respectively.

The debt to gross domestic products (GDP) ratio which is likely to remain at 90.6% during the current FY, would further rise in the next FY up to 91.8%, however, in the year 2021-22, the ratio is likely to come down to 89.6%, the report added.