The COVID-19 lockdown in Pakistan: Estimating economic losses using input-output analysis

Estimating economic losses resulting from an emergency is always a challenge for researchers, especially in a country like Pakistan where data availability is a constraint. A pandemic situation, such as that caused by COVID-19, is an example where inconsistent decision-making-for example, whether to impose a complete lockdown, a smart lockdown, or other restrictions on economic activity-further complicates the issue. Usually guess estimates are given for political and economic debate. However, formal methodologies are being tested to obtain more meaningful results. The present study estimates economic loss using the input-output method to build a more realistic picture. The methodology examines both the direct impact (in the form of losses in selected sectors through final demand) and the indirect impact (through total output). The study looks at a 46-day period in 2020 where all economic sectors were closed due to Pakistan's complete national lockdown. The results show that final demand decreased by 19.0%, while total output lost approximately 75.6 million USD. The results conclude that the primary sector experienced the greatest losses (31.0%), followed by the secondary and tertiary sectors (18.0% and 16.4%, respectively).