ISLAMABAD: The current wave of Covid-19 in Pakistan is proving to be more acute than the second wave, and the current number of critical care patients is larger than the one during the first wave in 2020, despite, a lower infection rate as of now, says the International Monetary Fund (IMF).
The IMF in its updated report, “Policy Actions Taken by Countries” which reviewed various steps Pakistan has taken to deal with the Covid-19 crisis, stated that indicators point to a moderation of the rate of Covid infection in Pakistan in the first week of May, although uncertainty remains elevated ahead of the Eid celebrations in mid-May.
In mid-March 2021, a third wave of infections started to emerge, with a steep rise in the number of cases and the positivity rate (exceeding 5,000 daily cases and 10 percent in the second half of April 2021, respectively), the report noted.
To mitigate the second wave, smart lockdown measures were re-imposed in the fall (e.g. ban on public meetings and rallies, closure of educational institutions, cinemas, theaters and wedding halls), but restrictions started to be lifted again starting mid-January before they were reimposed in mid-March 2021, in view of the third wave.
In the remainder of the month of May, the authorities plan to strengthen restrictions for a week around the Eid celebrations by banning inter-city transport, imposing lockdowns on markets, businesses, restaurants, parks, banning religious processions, and by limiting the number of inbound flights for two weeks.
It further stated the government of Pakistan is targeting to vaccinate 70 million people by the end of CY 2021 and has already vaccinated 2.1 million people as of April 28, 2021.
The vaccination campaign is being supported by the COVAX facility, as well as by the World Bank and the Asian Development Bank, who will provide (i) funding to procure additional vaccines and medical equipment, and (ii) technical assistance on issues related to procurement, distribution, and storage of the vaccine, and on operational and supply chain management.
The government has also allowed private laboratories to import and deliver vaccines (namely Sputnik V vaccine since April 2021).
The report stated that the State Bank of Pakistan (SBP) has expanded the scope of existing refinancing facilities and introduced three new ones in 2020 to: (i) support hospitals and medical centers to purchase COVID-19-related equipment (46 hospitals, Rs12.6 billion, to date); (ii) stimulate investment in new manufacturing plants and machinery, as well as modernization and expansion of existing projects (628 new projects, Rs436 billion, to date, ended by March 2021); (iii) incentivise businesses to avoid laying off their workers during the pandemic (2,958 firms , Rs238 billion, to date).
These facilities had been extended beyond their original deadline of June 2020 to September or December 2020. The schemes have now largely relapsed.
The SBP introduced temporary regulatory measures to maintain banking system soundness and sustain economic activity. These include: (i) reducing the capital conservation buffer by 100 basis points to 1.5 percent; (ii) increasing the regulatory limit on extension of credit to SMEs by 44 percent to Rs180 million; (iii) relaxing the debt burden ratio for consumer loans from 50 percent to 60 percent; (iv) allowing banks to defer clients’ payment of principal on loan obligations by one year (Rs657 billion being deferred to date); (v) relaxing regulatory criteria for restructured loans for borrowers who require relief beyond the extension of principal repayment for one year; and (vi) suspending bank dividends for the first two quarters of 2020 to shore up capital. The SBP has also introduced mandatory targets for banks to ensure loans to construction activities account for at least five percent of the private sector portfolios by December 2021, the report noted.
Copyright Business Recorder, 2021
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