Islamabad: IMF strongly supports the government package for the construction sector in order to make sure daily wage earners are back to work. IMF would continue to provide its support to the country to face the socio-economic challenges posed by COVID-19 and would work closely with the authorities on how to develop a roadmap and make it part of a good budget for next year.
The IMF will also fund an approx $1.4bn tool kit to fight the COVID-19 which was approved by the government. The IMF’s assessment of the situation was that COVID-19 would reverse the decline in public debt that resulted from fiscal consolidation efforts. This would also result in an increase in the primary deficit.
IMF Resident representatives in Islamabad appreciated the government for providing cash transfers to vulnerable families and other initiatives like rations to help the society. The IMF also supports the labor-intensive sector where daily wage earners would go back to work. They hope to support the construction sector for taking precautionary measures and resume back to work.
About the overall impact of COVID-19 on Pakistan’s economy, the IMF resident representative said there would be a significant cut in imports from Pakistan, the remittances would drop, tax collection would reduce considerably and the growth rate might reduce to -1.5pc. It is in this context that funds under the RFI arrangement would help Pakistan to bridge the gap in immediate financing needs.
In these circumstances, multilateral lenders such as the IMF would have to redefine their role as a socio-economic saviour to ensure the stability of Pakistan. The representative added, “The IMF is working to make Pakistan as competitive and open as possible by making it more export-oriented and an attractive destination for investment”.
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