COVID‐19 Lockdown in Pakistan: Estimating Economic Losses Using Input‐Output Analysis

Abstract

Estimating economic losses of an emergency is always a challenge for researchers especially in a country like Pakistan where data availability is a constraint. A pandemic situation like COVID‐19 is an example where inconsistent decisions like complete lockdown, smart lock down and other restriction on economic activity made the issue more complicated. Usually guess estimated are given for political and economic debate. However, work on testing some formal methodologies is still going on to get more meaningful results. The present study is an attempt to use Input‐output method to estimate the losses to build a more meaningful picture. The methodology includes the direct impact in the form of losses in selected sectors through Final Demand and indirect impact through Total Output. The study has taken time of forty‐six days for the year 2020 where all the sectors were closed due to nationwide complete lockdown. The results show that the economy faced a loss of 19 percent of the Final Demand. Moreover, the overall losses in the Total Output were about$75641 m. The results conclude that the Primary sector faced highest losses (31%) as compared to Secondary (18%) and Tertiary (16.4%) sectors.