Under the temporary regulatory measures of the State Bank of Pakistan(SBP), banks have deferred Rs. 659 billion of clients’ payment of principalon loan obligations for one year. This was highlighted by the InternationalMonetary Fund (IMF) in its report, “Policy Actions Taken by Countries.” Thereport reviewed various steps Pakistan has taken since March to deal withthe COVID-19 crisis.

This move has been made to strengthen the banking system and sustaineconomic activity, said the IMF report.

Starting in mid-November, the daily new cases of coronavirus have exceededthe 2,000-mark, and the positivity rate has been on an upward trend,especially in densely populated areas, pointing to the second wave ofinfections. As a result of COVID-19, the economic activity worsenednotably, with preliminary growth estimated at –0.4 percent in the fiscalyear 2020. A gradual recovery is expected in the fiscal year 2021.

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To mitigate the second wave, smart lockdown measures have been re-imposed,along with a general ban on public meetings, rallies, and the closure ofeducational institutions and venues such as cinemas, theaters, and weddinghalls. The government is in discussions with several vaccine manufacturersand has signed up for the United Nation’s (UN) COVAX Facility.

The government has also allocated $150 million for launching a vaccinationdrive in the second quarter of 2021.

The State Bank of Pakistan (SBP) has expanded the scope of existingrefinancing facilities and introduced three new ones to support hospitalsand medical centers to purchase COVID-19-related equipment (41 hospitals,Rs. 7.99 billion, to date), stimulate investment in new manufacturingplants and machinery, as well as modernization and expansion of existingprojects (269 new projects, Rs. 211 billion, to date), and incentivizebusinesses to prevent laying off of workers during the pandemic (2,958firms, Rs. 238 billion, to date). These facilities have been extendedbeyond their original deadline of June 2020 to December 2020.