Zubair Qureshi
Islamabad
Though Covid-19 pandemic struck a devastating blow to a low economic base country like Pakistan, certain sectors survived while giving hopes of recovery to the national economy. According to the Pakistan Economic Survey (PES) 2019-20, there was no significant impact of Covid-19 on the agriculture sector as the sector grew by 2.67 percent.
The positive growth of 2.90 percent in important crops was observed due to an increase in production of wheat, rice, and maize at 2.45 percent, 2.89 percent, and 6.01 percent, respectively.
Similarly, the increase has been witnessed in Fertilizer (5.81 percent), Leather products (4.96 percent), Rubber products (4.31 percent), Paper & Board (4.23 percent) and Non-metallic mineral products (1.82 percent). Besides these sectors, the pharmaceuticals also remained functional during the pandemic and in fact registered growth.
The PES 2019-20 disclosed that the pace of contraction diminished in the pharmaceutical sector as it registered 5.38 percent decline during July to March in FY-2020 as compared to 8.66 percent decline in the corresponding period.
Also, the pharmaceutical sector recorded the highest sales in March while it fetched $1.3 million Foreign Direct Investment in April 2020.
Once the textile industry was leading exports of the country but now the pharmaceutical sector has been identified as the sector that could enhance the country’s exports to boost the country’s foreign exchange reserves.
Pakistan’s pharmaceutical industry is an essential, high technology and a strategically important industry and at the present growth rate the market size for pharmaceuticals will double in the next 10 years in Pakistan.
But the impact of the pandemic will be severe in the coming months as the IMF has revised down its world GDP projections and now expects a contraction of 4.9% in 2020.
“Apart from the last three months, the next twelve months will also be very tough for the Pakistan economy,” said Taha Khan Javed, Head of Equities at Al Meezan Investment.
The outlook for Pakistan GDP is also precarious with growth for next fiscal year expected to be only 1-2%, much below the normal growth 3-5% we have seen in the past, he added.
He said that because of slowdown in economic activity especially in the informal sector it is expected that millions of people will be unemployed, while exports will also remain under pressure.Yet, he added, few industries including the pharmaceuticals of the country can play a vital role in their capacity to help the national economy.
While suggesting a way forward in this regard, Taha said that the pharmaceutical industry should ramp up their production capacity.
“And the government should ensure that timely price increases are given to companies so that they have incentive to increase their investment instead of relying on only imported medicines,” he added. Also, he added, the local players should further collaborate with international pharmaceutical companies to bring critical medicines in the country and eventually aim for joint venture investment of production facilities.
