The macroeconomic and epidemiological impacts of Covid-19 in Pakistan

Abstract

Abstract“Coronavirus Disease 2019” (C19) is a respiratory illness caused by “new Coronavirus” SARS-CoV-2. The C19 pandemic, which engulfed the world in 2021, also caused a national C19 epidemic in Pakistan, who responded with initial forced lockdowns (15-30 March 2020) and a subsequent switch to a smart lockdown strategy, and, by 31 December 2020, Pakistan had managed to limit confirmed cases and case fatalities to 482,506 (456 per 100,000) and 10,176 (4.8 per 100,000). The early switch to a smart lockdown strategy, and successful follow-up move to central coordination and effective communication and enforcement of Standard Operating Procedures, was motivated by a concern over how broad-based forced lockdowns would affect poor households and day-labour. The current study aims to investigate how the national Pakistan C19 epidemic would have unfolded under an uncontrolled baseline scenario and an alternative set of controlled non-pharmaceutical intervention (NPI) policy lockdown scenarios, including health and macroeconomic outcomes. We employ a dynamically-recursive version of the IFPRI Standard Computable General Equilibrium model framework (Lofgren, Lee Harris and Robinson 2002), and a, by now, well-established epidemiological transmission-dynamic model framework (Davies, Klepac et al 2020) using Pakistan-specific 5-year age-group contact matrices on four types of contact rates, including at home, at work, at school, and at other locations (Prem, Cook & Jit 2017), to characterize an uncontrolled spread of disease. Our simulation results indicate that an uncontrolled C19 epidemic, by itself, would have led to a 0.12% reduction in Pakistani GDP (−721mn USD), and a total of 0.65mn critically ill and 1.52mn severely ill C19 patients during 2020-21, while 405,000 Pakistani citizens would have lost their lives. Since the majority of case fatalities and symptomatic cases, respectively 345,000 and 35.9mn, would have occurred in 2020, the case fatality and confirmed case numbers, observed by 31. December 2020 represents an outcome which is far better than the alternative. Case fatalities by 31. December 2020 could possibly have been somewhat improved either via a more prolonged one-off 10 week forced lockdown (66% reduction) or a 1-month forced lockdown/2-months opening intermittent lockdown strategy (33% reduction), but both sets of strategies would have carried significant GDP costs in the order of 2.2%-6.2% of real GDP.