Relevance. Human health is essential to economic activity and social development. The rapid spread of the coronavirus disease (COVID-19) all around the world can be particularly disastrous for low-income persons, which means that the pandemic poses a severe threat for developing countries. In Pakistan, small and medium enterprises (SMEs) were hit especially hard by the pandemic and lockdown restrictions. This research focuses on the economic challenges faced by Pakistan in combatting the impacts of the pandemic.Research objective.The purpose of the article is to identify the difficulties faced by SMEs as a result of the coronavirus infectionData and methods. The methodological approach presents an analysis of statistical data to show the main problems of the SME sector during the COVID-19 pandemic. The study used the data from the statistical report of the Ministry of Health of the Government of Pakistan (GOP), as well as the data from previous studies on the effects of COVID-19 pandemic.Results. The study identified problems for SMEs during COVID-19, such as the lack of capital and the lack of satisfactory business plans. Moreover, poverty is one of the most serious problems in Pakistan, which is why SMEs cannot afford prolonged isolation during the Covid-19 pandemic and individual entrepreneurs have to risk their lives for their families. The government of Pakistan has adapted steps to control the epidemic, however, so far there is no policy for small business investors. The authorities are still working on the policies for small business units.Conclusions. Although Pakistan has adopted many protective measures, the situation regarding measures to support SMEs still leaves much to be desired.The lack of state support contributes to the general economic crisis the country has faced due to the pandemic.