Pakistan considers another stimulus package for reviving economy

Karachi: Pakistan's finance ministry is considering a stimulus package to support the economy, according to people familiar with the matter.

Newly-appointed finance minister Shaukat Tarin is leading the initiative, which can be monetary, fiscal or both, said the people, asking not to be identified as the discussions are private. The talks are initial and nothing has been decided, the people said. No formal proposal exists, Tarin said in response to questions.

The South Asian nation is expected to expand 3.9 per cent in the year ending June from a rare contraction in the previous period. Still, the government is wary of a fresh wave of the coronavirus pandemic derailing its projection. At the same time, the government is looking to renegotiate some terms of a bailout package with the International Monetary Fund, including raising power tariffs and some taxes, finance minister Tarin said in an interview last month.

The stimulus options include incentives in collaboration with the central bank or packages targeted at the poor, said one of the people. Pakistan has already disbursed 203 billion rupees ($1.3 billion) in cash handouts to the poorest segment of society, while the central bank introduced multiple support packages.

Pakistan's benchmark KSE-100 Index rose 0.5 per cent to the highest in four years.

Tarin was appointed in April just as Pakistan started to face a third wave of coronavirus cases, prompting authorities to order a week-long shutdown followed by another in the commercial capital Karachi.