PM Imran Khan just presented a Rs. 1.2 trillion worth Economic Relief Package in light of current crisis of COVID-19 in Pakistan. The economic team of federal government has been working on this packages since past few days in anticipation of the crisis that Pakistan’s economy is bound to face. The Prime Minister also clarified his notion about the confusion related to lockdown on Federal level and again asserted how Pakistan cannot bear the consequences of a curfew, both economically and uncertainty that exists regarding spread of virus after lockdown. Following are the highlights of economic package by federal government.
- Export Sector to receive a monetary relief of Rs.100 billion
- Small and Medium Enterprise (SME) to receive Rs.100 billion as relief
- Rs.200 billion allocated for relief to labor of Pakistan
- Extensions of Panahgahs for increased reach of government for providing food to needy
- Reduction of Rs. 15 in Petrol, Diesel, and Kerosene oil
- Poor Families to receive relief of Rs.150 billion over a period of four months
- Daily wagers will receive Rs. 3000 per month
- Rs. 280 billion dedicated for wheat procurement so that farmers can receive immediate cash
- Electricity consumers with consumption of up to 300 units and gas consumers with bills up to Rs.2000 will be provided relief in paying bills in installments
- Rs. 50 billion will be granted for purchase of necessary medical equipment and supplies for health workers
- Rs. 50 billion relief packages for utility stores
- Rs. 100 billion emergency fund for any unforeseen needs due to current or future lockdown
- Rs. 25 support fund for National Disaster Management Authority (NDMA)
- A separate package to be announced for construction sector to continue its operations amidst this crisis and support daily wagers
Apart from this, Lt. General Mohammad Afzal from NDMA gave good news regarding great efforts and support of Federal government in procurement of all necessary supplies, test kits, and ventilators from around the globe. Mr. Afzal gave details regarding big shipments arriving in Pakistan from China to tackle the Corona-virus pandemic. Pakistan will receive 125 tons of medical equipment comprising testing kits, protective equipment, surgical masks and ventilators from China. Moreover, Mr. Afzal also highlighted how local factories and exporters have joined government in providing all possible medical supplies for the healthcare sector in a short period which gives us hope for a better and prepared system in Pakistan for dealing with this crisis.
SBP Cuts Policy Rate by 1.5%
Soon after the meeting of PM with media, SBP announced a rate cut of 150 basis points to further support the falling industries of Pakistan. This drop in policy rate was highly speculated before the previous announcement of rate cut of 75 bps, however, the government deferred it till this point to avail an opportunity for covering its losses (See here). However, as part of economic relief package, the finance ministry has finally decide to reduce the policy rate further and support the economy and its stakeholders. This step is an addition to already provided relief to small, medium and large industries by SBP in their monetary policy on 17th March.