The International Monetary Fund has said it is working expeditiously to respond to Pakistan’s request for emergency assistance to deal with coronavirus outbreak through a relief package.
“Our team is working expeditiously to respond to this request so that a proposal can be considered by the IMF’s Executive Board as soon as possible,” Kristalina Georgieva, Managing Director IMF, said in a statement.
Pakistan’s top finance adviser Abdul Hafeez Shaikh said this week that Islamabad is seeking $1.4 billion loan from the IMF as part of efforts to provide relief to the affected communities under Prime Minister Imran Khan’s package to offset coronavirus impact.
Islamabad is also approaching the World Bank and Asia Development Bank to finance its more than $5 billion emergency stimulus package focusing on ensuring health and financial support. As of Friday morning, Pakistan, a country of more than 200 million people, has more than 1200 confirmed coronavirus cases and 9 deaths.
Prime Minister Khan has announced a large stimulus package, aimed at stepping up healthcare response and providing relief to the most affected people including daily wage earners and the marginalized. He has resisted calls for a complete curfew-like lockdown citing concern for workforce living on daily earnings. He has also called for rich countries to waive off loans they gave to developing countries to help speed up response to the coronavirus pandemic.
Pakistan entered a $6 billion IMF loan program to stabilize its economy through an array of reforms.
In the statement, the IMF leader acknowledged Islamabad’s continuing efforts to reform the economy.
“The authorities have continued their reform efforts to address Pakistan’s economic challenges, but progress is being threatened by the devastating effects of the COVID-19 outbreak and the deterioration in global economic and financial conditions,” Georgieva noted.
The IMF chief appreciated that the Khan government has swiftly approved an economic stimulus package aimed at containing the spread of the virus and providing support to affected families and businesses.
Similarly, the State Bank of Pakistan has adopted a timely set of measures, including a lowering of the policy rate, new refinancing facilities to support the flow of credit, and temporary regulatory relief measures.
“To support these efforts and ensure prompt and adequate relief to the people and the economy, the Government of Pakistan has requested financial assistance under the Fund’s Rapid Financing Instrument (RFI). This emergency financing will allow the government to address additional and urgent balance of payments needs and support policies that would make it possible to direct funds swiftly to Pakistan’s most affected sectors, including social protection, daily wage earners, and the healthcare system.”
In parallel, the IMF leader noted, Islamabad has reaffirmed its commitment to the reform policies included in the current arrangement under the Extended Fund Facility (EFF) under which the Fund began extending loans to the country last year.
These reforms are crucial to boost Pakistan’s growth potential to deliver broad based benefits for all Pakistanis, especially the most vulnerable segments of the population, she said.
“The Fund stands ready to continue to support the authorities’ efforts to implement much-needed economic and structural reforms aimed at fostering strong and sustainable growth.”
