In Pakistan, the economic report shows that as economies reopen with expectations that the adverse impact of COVID-19 is bottoming out, there is an on-going debate over the shape of the economic recovery. No doubt presently, investors have fears about fall in economic growth and business profits because of a fall in demand in the country. Further, still, restriction on imports in various countries may dampen demand for Pakistan’s exports. Capital flight is also predicted with prevailing uncertainty and vulnerabilities, thus putting pressure on the exchange rate. The economic report also show that the economic outlook is not very clear also doesn’t seem promising, however, the fiscal stimulus package of Rs 1.24 trillion along with measures taken through State Bank of Pakistan (SBP) for offering liquidity support to households and businesses will counteract the current economic downturn. Statistics show that IMFs Rapid Financing Instrument (RFI) amounting to $1.386 billion to counter the economic impacts of this novel outbreak will also support government’s efforts to mitigate the economic shock, the facility would be utilized to address declining international reserves and increase social sector spending. Additionally, concessionary lending by IFIs; the World Bank and Asian Development Bank will offer much needed support to the government during this crisis time and assist government of Pakistan to weather the Covid-19 challenge with minimum affects. For increasing the business condition in Pakistan more recently SBP, under its Rozgar scheme for protecting businesses and employees working with them from the impact of Covid-19, has so far accepted Rs 238.2 billion for 2,958 businesses. Similarly, under its refinancing scheme for protecting businesses from the impact of Covid-19, SBP has so far deferred Rs 659.5 billion worth of principal repayment of loans up to one year. Statistics also show that the bank also allowed restructuring or rescheduling of approximately Rs207.5 billion. The number of borrowers that would benefit from the rescheduling relief grew to 1.57 million with outstanding amount of Rs2.514 billion. Meanwhile, the bank under this refinancing scheme for hospitals to combat Covid-19 accepted financing of Rs 7.77 billion for 39 hospitals. Furthermore, during the period March 20 to November 20, SBP issued fresh currency notes to commercial banks worth Rs 1.136 trillion
Statistics also show that country received 10-month high foreign investment of $317.4 million in dissimilar sectors of the economy in October 2020, chiefly power production, 3G/4G mobile internet and oil and gas exploration. A significant share of investment, predicted at over 70 percent, flowed into the Pakistan from all-season friend China. Most of the investment went to coal-fired power projects. Besides, worldwide investors continued to pull investment out of government securities (PIBs and PSX).
Statistic also showed that foreign direct investment (FDI) surged over 150 percent to $317.4 million in Pakistan in October 2020 compared to $126.5 million in the same month of previous years. Cumulatively, in first four months (Jul-Oct) of current fiscal year 2020-21, the foreign investment grew 9 percent to $733.1 million as against to $672 million in the same period of last year.
Furthermore the power sector received the largest investment of $239 million in October, which constituted around 75 percent of total investment of $317.4 million. Investment in the power sector is largely made by Chinese firms. Moreover, coal-based power projects were the major beneficiaries of Chinese investment in Pakistan.
In the first four months of FY21, a major net investment of $352 million went into the power sector, followed by the financial business sector, which received a net $119 million and oil and gas exploration sector, which attracted $83 million. China was the largest investor with net FDI of $332 million in first four months of FY21 compared with $64 million in the same period of previous year. Malta emerged as the second-largest investor with net FDI of $74 million. The country had invested the same amount in the first four months of previous fiscal year. Despite the Covid-19, the government of Pakistan is striving for economic betterment of Pakistan and it is hoped that the economic progress will be witnessed very soon. The government experts say that revival of economy was the top priority of the government. Business community had a significant role to play and the government of Pakistan wants to impose a business and investment-friendly environment in Pakistan. Pakistan has faced numerous challenges over the past few years because of which the business community has suffered immensely. The government of Pakistan has ensured the continuation of business activities during the Covid-19 pandemic, which is a sign of its commitment to assisting the business community. Support and contribution of the business community in the fight against coronavirus has enabled the government to manage the disease. The Government of Pakistan for utilizing all possible resources to revive the economy and businesses during challenging times. Government has taken various steps to mitigate the impact of coronavirus on economic growth. Since the onset of pandemic-related economic pressure, the central bank had reduced its policy rate, allowed one-year extension in principal loan repayment along with rescheduling and restructuring of loans without affecting the credit history of borrowers. The demand for Pakistan’s products had narrowed down internationally owing to COVID-19 but anticipated a pickup over the next few months.