Governor Baqir stated that despite the challenging global environment during the COVID-19 pandemic, Pakistan comparatively fared better than most other countries. Not only did it contain multiple waves of the pandemic with much lower loss of human life, it also managed to preserve its macroeconomic fundamentals, as reflected in a shallower recession and stronger rebound in economic growth, reduction in public debt and a significant increase in its foreign exchange reserves. He furthermore elaborated on the various innovative and targeted measures undertaken by the State Bank to support Pakistan’s economy during the pandemic. This support mainly comprised a significant reduction of the policy rate, loan restructuring and extension programmes to ease the cash constraints on borrowers, and concessional finance schemes for preventing layoffs, upscaling healthcare facilities and encouraging capital investments.
In terms of the outlook, Governor Baqir outlined inflation and the current account deficit as challenges to the economy and linked them to the global surge in commodities prices, especially energy prices. He highlighted that compared to the past, the government and the State Bank of Pakistan has been more proactive in responding to these challenges through various measures to moderate domestic demand. To bolster long-term growth and address long-standing structural issues, the Governor discussed various initiatives undertaken by the State Bank of Pakistan, notably the digitization of the economy, financing for SMEs with no collateral requirements, and provision of concessional loans to encourage the adoption of renewable energy solutions in the country.
The event was well-attended, especially by members of the Swiss Business Council, Ambassadors of multiple countries, and Parliamentarians. The audience took advantage of this opportunity and actively took part in discussions during the event.
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