Pakistan in talks with IMF for additional $1.4bn amid coronavirus crisis: Hafeez Shaikh

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ISLAMABAD: Pakistan is in talks with the International fund (IMF) for a further sum of $1.4 billion due to the continued coronavirus crisis, Adviser to the Prime Minister on Finance Dr. Abdul Hafeez Shaikh announced on Wednesday.

“This sum [of additional money] breaks away the present program”, Dr. Shaikh said, pertaining to the continued three-year Extended Fund Facility (EFF) worth $6 billion. Pakistan’s economy was growing stronger but the COVID-19 pandemic was expected to dent it considerably, he added.

Remittances were likely to fall, as was the collection, and a slowdown within the economic activity throughout the country was imminent, the adviser said during a news conference here within the federal capital.

The government has, however, already announced a Rs1.2-trillion economic and financial relief package to keep off the negative impact of the coronavirus, he said. it’s further earmarked Rs200 billion for the labourers who would face extraordinary difficulties within the wake of nationwide lockdowns to contain COVID-19.

“We need to save our own people first. If someone loses their job, they will tend extra money than that,” he said.

“We will immediately release tax refunds worth Rs100 billion to the export industry,” Dr Shaikh added, noting that another Rs100 billion was put aside for the small- and medium-sized enterprises (SMEs) and agricultural sector.

“There would a discount within the prices of fertilizers and that we also will help subsidize through other ways,” he said, adding that smalls businesses would be granted loans and rate of interest on loans hamper.

The government was getting to provide financial assistance to almost 12 million people, whereas at the instantthe amount is five million, he said. they might tend Rs3,000 a month.

In order to bring down the costs of food and beverages, Dr. Shaikh said the Utility Stores Corporation of Pakistan (USC) would be offered Rs50 billion. He also mentioned that the govt intended to shop for 8.2 million tonnes’ worth of produce from the farmers, helping the cash flow to them.

Petroleum prices are slashed by Rs15 a liter, the adviser said, adding that they might be kept at an equivalent level for the subsequent three months.

“We’re giving Rs25 billion to the NDMA [National Disaster Management Authority] and that we will give them more should the necessity arise,” he said. “We also will found out another fund of Rs100 billion.”

Dr. Shaikh noted that the SBP had cut the policy rate by 2.25% and said he wished for the general public Sector Development Program (PSDP) to continue rapidly.

“We also are getting to do away with the CVT [capital value tax],” he said. “Pakistan received $350 million from the ADB [Asian Development Bank] and that we will take another $900 million in June,” he added.

Separately, Adviser to the Prime Minister on Commerce, Textile, Industries and Production and Investment, Abdul Razak Dawood, said there have been many industries that might not pack up in only each day.

“Tomorrow, it’ll be clear on who must be set straight,” Dawood added. “There is a minimum of 25 orders that can’t be canceled. There was a case yesterday when rice exporters’ [delivery] trucks were stopped.”

‘Suspend debt payments’

Economic Affairs Minister Hammad Azhar said Pakistan welcomed a replacement statement by the planet Bank (WB) and IMF “calling upon G20 countries to suspend debt payments of [developing] countries”.

“PM Imran Khan has been urging this since COVID-19 pandemic. We hope it shall be accepted & we also urge multi-laterals for relief on their debts,” he added.

In a joint statement, the 2 international organizations called on “all official bilateral creditors to suspend debt payments from IDA [International Development Association borrowing] countries that request forbearance”.

The statement added that such a suspension would allow the developing countries to deal with their “immediate liquidity needs” and for the G20 nations to form “an assessment of the crisis impact and financing needs for every country”.

“We will seek endorsement for the Proposal at the event Committee during the Spring Meetings (April 16–17),” the statement read.

A “global sense of relief for developing countries also as a robust signal to financial markets” was crucial given how the coronavirus pandemic was “likely to possess severe economic and social consequences for IDA countries”.

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