Governor State Bank of Pakistan (SBP) Reza Baqir has expressed deep ‘concern’ over the rising number of coronavirus cases in the country. The governor, however, remains confident of the strategies implemented by his organization and the government to counter this crisis.
Talking to CNBC, Reza Baqir addressed the issues pertaining to coronavirus pandemic and the expected challenges on the economic front.
“We are very concerned,” said Baqir, regarding the rise of the number of coronavirus cases in the country. “We have to remind ourselves that this is a public health crisis, and only on a secondary basis then it becomes an economic crisis. Until the public health crisis is addressed we should continue to expect challenges on the economic front,” said Baqir.
Regarding the lockdown strategy and the economic difficulties that comes with it, Baqir opined that for countries like Pakistan the tradeoff between lives and livelihood is a ‘very real tradeoff.’ “We have a lot of daily wagers, who if did not bring money home at the end of the day will be looking at starvation.”
He said that the current smart lockdown strategy of the government is working ‘reasonably well.’
MEASURES TAKEN TO STIMULATE GROWTH
Talking about the measures implemented by the government and the bank to mitigate the economic impact of COVID- 19, Baqir stated: “They are certainly in a right direction, fiscal policy gave support, we gave support by our measures the total amount of liquidity injection that we have done as a combination of deferment of loan principles that were coming, some concessional credit schemes that we have launched in partnership with banks.”
Reza informed that they have provided $7 billion in terms of liquidity support to households as well as businesses i.e. about 2.5 percent of Pakistan GDP.
“For a country that has a large public debt, we have to strike a balance between giving prudent response and watching our fundamentals, right now we are confident that we are striking the balance, and we are prepared to take more action within the construct of striking a balance if needed,” he said.