INFLATION is down to single digits and the balance of trade has improved. These are the only silver linings on the corona cloud. A little more than three months after the first patient was diagnosed in Pakistan, deteriorating economic indicators have become a snowball gathering pace and no crystal ball can foresee how bad things will get before the snowball reaches the bottom of the mountain.

The silver lining itself is more grey than glittery since the lower oil prices have resulted in rumblings of a shortage and lower inflation is more of an indicator of a stupefied economy than ease for the common man.

There are some rose-tinted ramblings of economic damage being contained by this fiscal year with 2020-21 posting a modest growth of roughly two per cent. However, this sounds more like a false hope that no one is buying rather than a realistic projection.

Remittances, the current account saviour, is likely to continue its downward slide as expatriates lose their jobs in tanking economies and come home. While some time was bought in delaying debt servicing, a reckoning will come sooner or later plunging foreign exchange reserves.

The decrease in imports due to a lower oil bill is relatively a short-term trend compared to the hit exports have taken, which may take years to recover. Similarly, foreign direct investment may be limited not only as businesses globally retrench and downsize but also because of the likely trend of increase in reliance on businesses at home rather than invest abroad. The long dark night ahead has just started.

Published in Dawn, The Business and Finance Weekly, June 8th, 2020