Pakistan should continue efforts toward fiscal consolidation and policy reforms: ADB

As COVID-19 pandemic continues to pose major health care and economic challenge to Pakistan. The country needs to continue its efforts toward fiscal consolidation and policy reforms that will be key to sustaining improvements in macroeconomic, especially in broadening the tax base and improving the business environment.

This was stated by the Asian Development Bank (ADB) in its latest Fact Sheet on Pakistan. The ADB report highlighted that reforms are required to promote high value-added exports, expand social spending, reinforce energy sector financial and technical sustainability, and implement structural changes that will strengthen institutions and create jobs.

The report mentioned that ADB will support Pakistan’s development priorities as outlined in the bank’s new country partnership strategy, 2021–2025.

“The strategy focuses on improving economic management, building resilience, and boosting competitiveness and private sector development,” it said.

ADB’s assistance will comprise support for structural reforms and project assistance in key sectors, including energy, transport, irrigation, agriculture, urban infrastructure and services, small and medium-sized enterprises, and social development.

In 2020, ADB’s loan and grant disbursements to Pakistan amounted to $1.78 billion, comprising $1.1 billion in program lending and $680.7 million from project lending. ADB provided significant and rapid support to Pakistan’s coronavirus disease (COVID-19) pandemic response.

This included a $500 million loan under the bank’s COVID-19 Active Response and Expenditure Support Program to help the government deliver social protection programs. The funds were channeled through the government’s flagship poverty alleviation program, Ehsaas, to expand health sector capabilities and deliver fiscal stimulus to boost economic growth and create jobs.