The outbreak of the coronavirus (COVID-19) has become a headache for the global economy after the mysterious virus has already caused massive supply chain disruptions, alongside slowing down the economic giant China, the epicenter of the virus.
However, the slowdown in the Chinese economy could be a boon for Pakistan’s exports, which can increase at least in the medium term, Deputy Governor of the State Bank of Pakistan (SBP), Murtaza Syed was quoted as saying in a report.
He said that Pakistan has deep trade links with China and would likely be affected by the halting of industrial and economic activities in the neighboring ally.
The central bank official was of the view that Pakistan’s exports can be increased in view of the halting of exports from China. However, Murtaza was of the view that the increase in exports will be a medium-term opportunity.
He said that Pakistan imported sixty percent of machinery and twenty percent of raw materials from China and stated that due to disruption in the supply chain because of the coronavirus, local importers have started looking at other markets.
Just days ago, the Asian Development Bank (ADB) in its latest report said that the coronavirus outbreak could cost the Pakistan economy in the range of $16.387 million to $4.95 billion, or 0.01 to 1.57 percent of gross domestic product (GDP).
In the best-case scenario, the impact on Pakistan would be limited to a $16.387 million, or 0.01 percent. In the moderate case scenario, the outbreak in China is more widespread and lasts longer, with travel bans and precautionary behavior abating only after three months. In such a scenario, the impact on Pakistan would be $34.12 million.