Impact of lockdown on households

The economic impact of partial or full lockdown falls on the households by reducing their purchasing power and income. In short, lockdowns have been linked to increasing poverty. A recent Gallup Pakistan report presents these sufferings through a survey conducted in April 2020 via telephone with a statistically selected sample of 1500. The results of the survey clearly show that people had started to feel the pinch from the lockdown.

The survey has three key takeaways. First and the much dreaded, food security. As a result of no work/ shutdowns, jobs have come under threat. The survey shows clear rise in food insecurity fears; around 6.9 million households claim to have reduced the number or size of meals for some family members to cover their household's basic needs. The incidence is higher in urban respondents (27 percent) than the rural (20 percent). Close to 25 percent reveal that they have been relying on cheaper and less preferred food items. Moreover, people have been forced to turn to relatives and friends for help for basic households needs.

The second finding is the growing financial insecurity. For a country that has low savings rate, the stress on finances can be too drastic. According to Gallup Pakistan, just about 1 in 5 Pakistanis (19 percent) has been forced to lean on whatever little cash or bank savings they have for basic household needs.   Also, the results show that close to 10 million adults – more in urban areas than in rural areas - have started to look for alternate earning sources.

And third, there has been a rise in reliance on outside help.  Three million Pakistani households have been left with no choice but to rely on government or NGO assistance, and around 1.8 million households have sold assets recently to cover their basic household needs.

When and how to ease the lockdown is now a real challenge for economies. Pakistan had decided to lift restrictions and end lockdown in a phased manner over the weekend as the economic cost of lockdown has grown exponentially. However, the decision to do away with restrictions must be accompanied by systematic planning and country’s preparedness.