2020 has been a very traumatic year, in general. With the pandemic, people got ill, but there were many other non-medical consequences as well. Many businesses shut down because of the lockdowns in place. People lost jobs as well. And the stock market shattered.
But not to be depressed because 2021 is starting to look better. It is expected that the year will begin to improve from January. By June, it will have marked significant economic recovery in Pakistan, as noted by the Asian Development Bank (ADB). So basically, the forecast by ADB assumes that the COVID impact will ultimately end on the economy by December 2020.
Having been presented with this forecast, the government is planning to incorporate further economic stimulation in the financial year 2021.
Breaking News: KSE 100 touches highest level in 2020. Breaches 43,471!
Investors excited and looking forward to a better 2021. Economic stabilization achieved & 2021 is a year for growth and wealth creation. #Pakistan @FarrukhHKhan @Hammad_Azhar @AajKamranKhan @PTIofficial pic.twitter.com/CICUI1MlWE
— A A H Soomro (@AAHSoomro) December 15, 2020
And we can see that from the status of KSE here. As the trajectory indicates, the stock market took a significant dip in April when the pandemic was the peak. But ever since then, it has gradually been improving. And finally, in Mid-December it achieved its very peak.
Coming back to 2021, inflation will also ease up. It will go to 7.5%, which is lower than what was forecasted for April in ADO 2020. Moreover, the fiscal deficit will also presumably decline to 7.0% in FY 2021.
ADB Country Director for Pakistan Xiaohong Yang said:
“Pakistan has achieved notable success in containing the dual health and economic challenge presented by COVID-19. As the curve flattens and business activity resumes, the economy is showing signs of resilience and recovery. The government’s rapid mobilization on 24 August of a 1.2 trillion rupee relief package comprising emergency financial support to daily wage earners, cash transfers to low-income families, accelerated procurement of wheat, support for health and food supplies, and financial support for small and medium enterprises helped shield the poor and most vulnerable during the pandemic. ADB remains committed to supporting Pakistan through this difficult period and helping the country get back on the growth path.”
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