ISLAMABAD: On Monday the International Monetary Fund (IMF) noted the rapid pace at which COVID-19 spread to Pakistan and acknowledged the government’s announced Rs1.2 trillion relief package.
“COVID-19 has spread rapidly in Pakistan over the past month, with 4,489 reported cases reporting 63 deaths as of April 9,” said the IMF in its latest release Policy Tracker of its 193 member states.
In addition, the fund said both the federal and provincial governments have adopted a series of delay steps to contain the virus spread. This included quarantining over three thousand Iranian passengers, closing borders with neighboring nations, international travel bans, school closures, social distancing measures, and lockdowns around the country in cities and provinces.
At the beginning of March 23, Pakistan army troops were deployed to support provincial governments in their efforts to control virus spread.
On the fiscal side, authorities on Mar 24 declared a relief package worth Rs1.2tr. This, the IMF said, included removing import duties on imports of emergency health equipment, assisting daily wage workers worth Rs200bn, followed by Rs150bn of cash transfers to low-income households, accelerating Rs100bn of export tax refunds and Rs100bn of financial assistance to small and medium-sized enterprises.
The economic package also allocated money at Rs280bn for accelerated wheat procurement, Rs50bn financial support to utility stores, Rs70bn fuel price relief, Rs15bn health, and food supply support and Rs110bn electricity bill relief payments. This also included Rs100bn to buy the necessary equipment for an emergency relief fund and Rs25bn transfer to the NDMA.
On the monetary and macro-financial side, the State Bank of Pakistan (SBP) responded to the crisis by cutting the policy rate twice in less than two weeks in March, by a cumulative 225 basis points to 11pc.
The SBP approved two refinancing schemes on March 17. First, TERF worth Rs100bn to stimulate investment at 7pc in new production facilities and machinery, and second, RFCC worth Rs5bn to support hospitals.