April 5, 2020 (MLN): The departed week witnessed many such actions taken by the local government and international agencies that could lead to lessening the impact of the COVID-19 outbreak on households and businesses.
On Friday, the Govt of Pakistan and World Bank signed a $200 million project for the COVID-19 response which will be utilized for emergency preparedness/response, emergency cash transfers to poor, emergency food supplies for quarantined populations, mitigation of impacts in education.
Meanwhile, the government offered up to Rs100 billion packages to the industrial sector as support following the current challenging situation, created due to COVID- 19 pandemic.
In addition to this, the Prime Minister Imran Khan also announced an incentivized package for the construction industry in the wake of coronavirus outbreak, as per which the investors investing in construction projects under Naya Pakistan Housing Authority, would get relief of ninety percent fixed tax and he will have to pay only ten percent tax. Moreover, withholding tax on construction will be lifted from all sectors, except steel and cement.
The same day, State Bank of Pakistan in the wake of challenges arising out of COVID-19 pandemic has expanded the scope of its recently announced relief package for households and businesses, by allowing similar relaxations, as provided under the relief package, on its concessional refinance schemes.
Furthermore, Advisor to Prime Minister on Commerce Abdul Razzaq Dawood said that the government has made a strategy to allow the export-related industry to start its operation in a phased-manner.
Moreover, the Economic Coordination Committee (ECC) of the Cabinet on Monday approved the fiscal stimulus package of Rs. 1.2 trillion aimed at addressing the ongoing challenges that emerged due to COVID-19 (Coronavirus) outbreak.
On the other hand, despite COVID-19 situation, Privatization Commission (PC) team, under the leadership of Federal Minister /Chairman Muhammad Mian Soomro continued to keep foreign investors engaged in the Privatization plan of the Government of Pakistan by holding a series of videoconferences/meetings with the pre-qualified investment parties for the privatization of two power plants (Haveli Bahadursha and Balloki) of National Power Plant Management Company Limited (NPPMCL).
The previous week also witnessed grants and support provided by the International agencies such as World Bank and ADB which include; $2 million grant by ADB to support the government’s efforts to combat the coronavirus (COVID-19) pandemic in the country and a $700 million additional financing by World Bank to help the country generate low-cost, renewable energy to provide affordable electricity supply to millions of users.
On the upside, Minister for Planning and Development, Asad Umar said that the Sensitive price indicator increase, the first time in more than a year has fallen to single-digit 9.27% which was the lowest increase in 14 months.
On the downside, Moody’s said that Pakistan is one of the countries that might face persistent tightening in financing conditions, which in turn will increase its debt burdens, weaken debt affordability and intensify external vulnerability risk.
Additionally, Moody’s further slashed Pakistan’s estimated growth rate to 2% for the current fiscal year due to the COVID-19 outbreak.
Similarly, according to Asian Development Bank’s (ADB) latest annual flagship economic publication, Asian Development Outlook (ADO) 2020, the Economic growth in Pakistan is expected to slow to 2.6 percent this year due to ongoing stabilization efforts, slower growth in agriculture and the impact of the COVID-19 outbreak, before recovering to 3.2 percent in 2021.
Lastly, the Oil and Gas Regulatory Authority (OGRA) on Tuesday issued a price-revision notification of Liquefied Petroleum Gas (LPG) for the month of April, as per which the authority reduced the locally produced LPG price by Rs 462.78 per cylinder of 11.8 kilograms.
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