The COVID-19 pandemic is taking its toll on the world, causing deaths, illness and economic despair. It has not been ascertained how the deadly virus is impacting world economies. This requires assumptions on how to forecast growth and its impact which is challenging and comes with a lot of uncertainty.
The World Bank estimates that economic activity and spending will resume after the pandemic subsides, while developing countries could be the worst affected in case expenditures re not increased. In the recent World Economic Outlook, the financial institution forecasts that the global output is projected to contract by 3 percent in 2020.
The forecasts reveal that COVID-19 pandemic is likely to cause the first increase in global poverty since 1998 when the Asian financial crisis struck. With the new forecasts, global poverty – the share of the people living on less than $1.90 per day – is projected to increase from 8.2 percent in 2019 to 8.6 percent in 2020. This suggests that COVID-19 will push 49 million people into extreme poverty in 2020.
The ICRC which serves in conflict zones has stated that COVID-19 has overwhelmed health systems and victims of conflict still need assistance. The head of the Red Cross has expressed fear that unless urgent action is taken to curb the spread of the virus, it will devastate some of the world’s most vulnerable communities. We need to urgently move forward or else it will be impossible to fight the virus in war-torn conflict-ridden countries or those with weaker health systems.
The situation is worsening even in Pakistan as the number of coronavirus cases keeps rising gradually. The political squabbles over a lockdown continue as the government faces the tough decision to either resume economic activities or safe lives.
The situation could worsen as safety measures and social distancing is still not being strict enforced. The government needs to increase the testing capability particularly in tightly packed slum areas in which people live together closely. For now, economic activities remain suspended as traders, businessmen and situation could even worsen.
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