In face of COVID-19: IMF, Pakistan's economy is growing strongly

Pakistan has set a target of 70 million individuals for coronavirus vaccination by the end of 2021; roughly 3 million people have been fully immunised and some 13 million people have been vaccinated till 1 July 2021, according to the International Monetary Fund (IMF).

In its latest report, the IMF claimed that it is under control for new daily cases falling short of 1.000, with the positive rate decreasing below 2.5%, which comprises a review of the many actions Pakistan took to address the epidemic.

Economic activity deteriorated considerably with a negative growth of 0.5% in the financial year (FY) 2020, but in FY 2021 it boomed strongly and preliminary growth was predicted at 3.9%.

The research found that in July 2021, most of the remaining limits were abolished and the number of incoming planes rose. Meanwhile, for interior services and for events, immunisation certification is necessary.

The immunisation programme is funded with financing and technical help from COVAX, the World Bank and the Asian Development Bank.

The government is allocating cash to get Chinese vaccinations because of delayed supply from the COVAX facility and also deploying 'PakVac' — a local vaccine created by China's single-shot CanSino manufacturer.

Since April 2021, the government has also authorised the import and supply of vaccination (Sputnik V Russian) by private laboratories. In addition, fiscal relaxation and significant increases in spending allocations, notably in health care, were granted by the provincial FY 2021 budgets.The State Bank of Pakistan (SBP) has increased the scope and launched three new refinancing facility by 2020 to:
  • Hospitals and health centres to support the acquisition (47,6 billion Rs) of COVID-19 equipment;
  • Stimulate investment in new production facilities and machines and modernise and expand current projects (628 new projects, to date Rs. 436 billion, completed in March 2021);
  • Encourage companies to prevent workers from laying off in the pandemic (2,958 firms, Rs. 238 billion to date).
  1. Reduction of 100 base points to 1.5% of the capital conservation buffer;
  2. increase by 44 percent to Rs. 180 million the regulatory ceiling for the provision of credit to SMEs;
  3. Relaxing the consumer loans debt load ratio from 50% to 60%;
  4. enabling banks to postpone the main payment of customers on credit bonds by one year (the latter amount is EUR 657 billion);
  5. Relaxing the regulatory standards for borrowers who need to provide assistance beyond one year's extension of the principle payments for restructuring loans;
  6. Bank dividends suspended to increase capital in the first two quarters of 2020.
In addition, mandatory objectives for banks have been established in order to secure loans for construction operations representing at least 5% of the private sector portfolios by December 2021.

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