ISLAMABAD: Pakistan’s most export markets with the exception of China have been hit by the recent upsurge in the Covid-19 infections and hospitalizations, according to the Finance Ministry’s economic update.
The ministry in its monthly economic update for November 2020 noted that in the Euro area and the UK, fresh lockdown measures have been imposed to flatten the curve.
On the other hand, in the US, no major restrictions have been imposed yet, thus, infections seem still rising.
As a result, the recent economic indicators show mixed global outlook.
The weekly economic index (WEI) continued its upward trend up to the latest available data point in mid-November 2020; however, improvement in recent weeks seems to decelerate due to upsurge in new cases.
Current value of this index indicates that the economic growth is still far from its pre-crisis’s level.
The composite leading indicator (CLI) compiled by the OECD, has shown further improvement for the US.
The same happened in China.
In the Euro Area, the index improved only marginally, whereas, it declined in the UK. According to these leading indicators in Pakistan’s most important export markets, the CLI of October 2020 has fully recovered from the pandemic-led recession in China.
However, in the US and the Euro Area, the CLI remained below pre-pandemic levels, whereas for the UK, it remained marginally lower.
The recent precautionary measures taken in the Euro Area and in the UK, which may soon be followed by the US, may slow down their near-term economic recovery.
The same optimism was reflected in the Euro Area stock markets, but they are still well below pre-pandemic levels.
The reaction in the Chinese stock markets was less pronounced.
Information Handling Services (IHS) Market, London–based global information provider released its final purchasing managers’ indices (PMIs) for services in multiple countries.
The Covid-19 resurgence in infection rates is causing renewed contraction in some countries.
Euro zone is seeing worrying stalling of growth.
The US is witnessing improved manufacturing and services but still acceleration is dampened by weak consumer services and uncertain outlook.
China and the UK saw upturn but for the UK, steepest fall is seen in employment.
The food prices have spiked in several countries, especially in South and East Asia and as per the World Bank (WB), Commodity Market Outlook, October 2020; agricultural prices are expected to rise slightly in 2021 following a projected three percent increase in 2020.
Despite a modest increase in prices, concerns about food insecurity in several emerging markets and developing economies have risen.
In addition to lowering incomes, the pandemic has created bottlenecks in food availability at the local level due to supply chain disruptions and border closures that have restricted food flows and movements of labor.
Thus, spike was observed in food prices in several countries, especially in South and East Asia.
Copyright Business Recorder, 2020