‘Pakistan, IMF on same page regarding power sector reforms, circular debt’

ISLAMABAD: State Bank of Pakistan (SBP) Governor Dr Reza Baqir said on Tuesday that the International Monetary Fund, like the government, wants power sector reforms and reduction in circular debt.

He was addressing the plenary on ‘Pakistan’s Economic Response to Covid-19 and Way Forward for an Inclusive Economic Recovery’ on the second day of the 23rd Annual Sustainable Development Conference of the Sustainable Development Policy Institute (SDPI).

The SBP governor said the country’s exports have recovered to the pre-Covid monthly level of around $2 billion, with strongest recovery seen in textiles, rice, cement, chemical, and pharmaceutical sectors.

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He stressed that Pakistan needs to focus on ways to improve competitiveness and reduce dependency on imports in order to ensure sustainable growth.

“To boost economic activity and job opportunities in the country, the central bank is working with the banks to ensure that lending to small and medium enterprises (SMEs) and housing sector are increased.”

He said the government has coordinated a consistent and holistic policy to promote the housing and construction sector. “At the central bank’s end, we are working with the banks to help them support this sector,” he added.

Dr Reza Baqir noted India’s economy had suffered a sharp decline due to Covid-19 outbreak, as compared to Pakistan, adding that the government and SBP had taken timely measures to stop bankruptcies from happening since that could have led to long-term implications.

“Now that demand is coming back from the world market, our exporters are ready due to the liquidity and smart lockdowns. What we need to focus now is to increase our export-to-GDP ratio,” he concluded.

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