IMF appreciates Pakistan performance in the “Policy Action Taken by Countries”
Under the temporary regulatory measures of the State Bank of Pakistan (SBP), banks have deferred Rs. 659 billion of clients’ payment of principal on loan obligations for one year. This was highlighted by the International Monetary Fund (IMF) in its report, “Policy Actions Taken by Countries.” The report reviewed various steps Pakistan has taken since March to deal with the COVID-19 crisis.
This move has been made to strengthen the banking system and sustain economic activity, said the IMF report.
Starting in mid-November, the daily new cases of coronavirus have exceeded the 2,000-mark, and the positivity rate has been on an upward trend, especially in densely populated areas, pointing to the second wave of infections. As a result of COVID-19, the economic activity worsened notably, with preliminary growth estimated at –0.4 percent in the fiscal year 2020. A gradual recovery is expected in the fiscal year 2021.
To mitigate the second wave, smart lockdown measures have been re-imposed, along with a general ban on public meetings, rallies, and the closure of educational institutions and venues such as cinemas, theaters, and wedding halls. The government is in discussions with several vaccine manufacturers and has signed up for the United Nation’s (UN) COVAX Facility.
The government has also allocated $150 million for launching a vaccination drive in the second quarter of 2021.
The State Bank of Pakistan (SBP) has expanded the scope of existing refinancing facilities and introduced three new ones to support hospitals and medical centers to purchase COVID-19-related equipment (41 hospitals, Rs. 7.99 billion, to date), stimulate investment in new manufacturing plants and machinery, as well as modernization and expansion of existing projects (269 new projects, Rs. 211 billion, to date), and incentivize businesses to prevent laying off of workers during the pandemic (2,958 firms, Rs. 238 billion, to date). These facilities have been extended beyond their original deadline of June 2020 to December 2020.