Federal Minister for Finance and Revenue, Mr. Shaukat Tarin, delivered remarks on behalf of Pakistan at a virtual event held on the sidelines of the 77th session of United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) titled “Debt Relief in the Aftermath of the Pandemic: How can Regional Dialogue help”.
In his virtual remarks, the Finance Minister apprised the august forum about the economic challenges faced by Pakistan due to COVID-19 pandemic. Due to precarious economic situation in 2018, Government of Pakistan had to opt for IMF program to fix balance of payments crisis. Pakistan successfully met all benchmarks during first performance review criteria. 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.
To lessen the severe impact on the economy, the Government of Pakistan introduced largest ever economic stimulus package for SMEs to shield against insolvency and facilitated Construction sector & allied industries to stimulate growth during testing times. 16 million families were given direct cash transfers under Ehsaas program which roughly accounts for 46% the total population of Pakistan in order to protect the most vulnerable segments of the society, he added.
The Finance Minister further stated that, at present, Pakistan has resumed the IMF program and is faced with a difficult choice to strike a balance between need for fiscal consolidation and ever rising demand for economic stimulus amid COVID-19 and in post-COVID scenario.
The third wave of COVID-19 is particularly challenging and Pakistan needs support of development partners to stimulate recovery. Our economy is showing nascent signs of economic recovery as Large Scale Manufacturing is posting significant growth but there is a need to continue this momentum which is not possible without external support.
The Finance Minister of Maldives as well as high level delegates from Mongolia and Kyrgyz Republic also participated during 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 are facing fiscal constraints and liquidity crises during the Pandemic. The session concluded that there is a need for continued regional dialogue to learn from country experiences and thereby face challenges posed by pandemic in a better manner.
