The International Monetary Fund's (IMF) Executive Board on April 16 approved $1.39 billion in emergency financing to Pakistan to help it address the economic impact of the coronavirus pandemic.
The funds will help Pakistan meet the “urgent balance of payment needs” stemming from the outbreak, the IMF said in a news release.
Geoffrey Okamoto, first deputy managing director, said the outbreak of COVID-19, the disease caused by the coronavirus, is having a significant impact on the Pakistani economy.
The urgent balance of payments needs have been created by domestic containment measures coupled with the global economic downturn, Okamoto said. These are “severely affecting growth and straining external financing,” he said.
The funds will help Pakistan deal with a decline in international reserves and allow it to fund temporary spending aimed at containing the pandemic and mitigating its economic impact, the IMF said.
“With the near-term outlook deteriorating sharply, the authorities have swiftly put in place measures to contain the impact of the shock and support economic activity,” the IMF said. “Crucially, health spending has been increased and social support strengthened.”
Pakistan's government on April 14 announced an extension of the nationwide shutdown and restrictions on public gatherings for another two weeks. Educational institutions will also remain shut during that period.
The government has said, however, that a number of industries would be allowed to operate if they adhere to safety guidelines. Among them is the construction industry.
Pakistan has already been in lockdown for three weeks, prompting warnings that a prolonged economic halt could push half of the country’s population into poverty.
Pakistan has reported about 7,000 coronavirus cases and 128 deaths, according to Johns Hopkins University.