Finance Minister seeks support to stimulate economic recovery

ISLAMABAD: Federal Minister for Finance and Revenue Shaukat Tarin sought support from development partners to stimulate economic recovery during the ‘challenging’ third wave of the coronavirus.

“The third wave of COVID-19 is particularly challenging and Pakistan needs support of development partners to stimulate recovery,” the minister said

He was delivering his remarks at a virtual event held on the sidelines of 77th session of United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP).

The minister said the country’s economy was showing nascent signs of economic recovery as the Large Scale Manufacturing (LSM) sector was posting significant growth but there was a need to continue the momentum, which was not possible without external support.

The finance minister apprised about the economic challenges faced by Pakistan due to COVID-19 pandemic, saying due to precarious economic situation in 2018, the government had to opt for the International Monetary Fund (IMF) programme to fix balance of payments crisis.

He said Pakistan successfully met all benchmarks during the first performance review criteria, and all fundamental economic indicators reflected significant improvement before the onset of COVID-19.

Unfortunately, the COVID-19 shock resulted in considerable economic contraction leading to loss of livelihoods, disruption in supply lines and limited economic activity during partial lockdowns, he added.

To lessen the severe impact on the economy, he said the government introduced the largest-ever economic stimulus package for the small medium enterprises (SMEs) to shield against insolvency, and facilitated the construction sector and allied industries to stimulate growth during testing times.

The finance minister further stated that at present, Pakistan had resumed the IMF programme and was faced with a difficult choice to strike a balance between need for fiscal consolidation, and ever rising demand for economic stimulus amid post-COVID scenario.

The finance minister of Maldives as well as high level delegates from Mongolia and Kyrgyz Republic also participated in the session.

The other delegates highlighted the need for evolving a mechanism to provide maximum debt relief to the developing and under-developed countries, which were facing fiscal constraints and liquidity crises during the pandemic.

The session concluded that there was a need for continued regional dialogue to learn from country experiences and thereby face challenges posed by pandemic in a better manner.