The world will probably rethink global supply chains after recovery from coronavirus so as to prevent concentration of industries in one country, China, which will give some industries a chance to move to Pakistan, “said SBP Deputy Governor DrMurtaza Syed of the State Bank of Pakistan.
Speaking at a meeting to discuss the impact of coronavirus on Pakistan’s trade, organised by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Syed pointed out that though coronavirus cases were decreasing in China, the infections were increasing in other countries. “By the end of May, the situation may improve,” he added.
The central bank official stated that 50-60% of the factories were closed in China due to COVID-19, therefore, next quarter results would show a decline in economic growth. Last year, the global GDP grew around 3%, which was going to fall this year due to the epidemic, he said.
“Risk appetite is decreasing among investors around the world and money is moving towards risk-free markets like bonds,” he said.
Syed pointed out that England and other developed economies were reducing interest rate to help their markets cope with the impact of the coronavirus.
“Machinery import is decreasing as Pakistan has completed imports under the China-Pakistan Economic Corridor (CPEC), therefore, currently we have some room. However, due to the decline in machinery imports, progress on the Special Economic Zones (SEZs) is going to be delayed.”
He pointed out that the exporters were also looking towards Africa and European countries to divert their exports. “Recently, oil prices decreased, which is going to have a positive impact on Pakistan, as oil is one of the major commodities imported every year.” In the near future, the situation due to the coronavirus could turn worse, but there was hope in the long term, he remarked.
Speaking during the meeting, The Indus Hospital Infectious Diseases Consultant Dr Samreen Sarfaraz said, “COVID-19 is a storm in a teacup, which is exaggerated and shown as a tsunami.”
“COVID-19 is moderately transmissible and a new viral illness of low mortality rate,” she said. “Roughly, 80% of patients recover without being admitted in a hospital, other 17% recover after admission for supportive care and only 3.4% die,” she said.
“Its pandemic potential is nothing when compared to the influenza pandemics in the past.”