The finance ministry has informed the Senate that the coronavirus pandemic can result in an estimated 3 million people being unemployed and the poverty rate surge to 33.5%.
In a written reply submitted to the Upper House on Friday, the ministry warned that the budget deficit will increase to 9.34% due to the ongoing pandemic which has proven to be a setback for businesses around the globe.
The ministry stated that out of the 3 million estimated who could lose their jobs due to the pandemic, a million from the industrial sector will be unemployed while 2 million people will lose their jobs from the services sector. It added that the rate of unemployment will rise from 24.3% to 33.5%.
“The rupee was also devalued by 7.5% per month due to the coronavirus pandemic from February till March,” the ministry told the lawmakers, adding that the DGP growth before the pandemic is expected to be 3.24%. However, the 0.4% negative growth was recorded in the ongoing fiscal year.
On the other hand, the ministry also said that FBR revenue from April to June will fall between Rs 700 billion and Rs 900 billion. It warned that FBR’s tax revenue can decrease to Rs 3.9 trillion, adding that the board’s tax target was Rs4.9 trillion. “The fiscal deficit will increase from 7.5% to 9.5%,” the ministry told the senators, adding that the virus will also hamper the country’s exports which are expected to reduce to $22.22 billion. Remittances from overseas workers will also be reduced by $2 billion and the budget deficit can increase to 9.4%, said the finance ministry.
