Pakistan May Post 5.5% YoY Economy Contraction Amidst Prolonged Lockdowns

The Lahore School of Economics (LSE) has estimated that the country may post a GDP contraction of 5.5% YoY, if the lockdown continues for a period of nine months, from March to November 2020. This estimation is significantly worse than other estimates made by key financial institutions, which forecast a 1.5% YoY contraction.

The LSE determined by using a general equilibrium macro model, that under a best-case scenario, Pakistan may experience a 2.9% YoY contraction in overall GDP growth in 2020, following a three-month lockdown from March to May 2020. This would result in 1.5 million job losses by the end of 2020 according to the study.

Meanwhile, if the lockdown is extended to six m...