The finance ministry is considering a stimulus package to support the economy, said a report in Bloomberg.
According to the report, Shaukat Tarin, the newly-installed finance minister, is leading the initiative that can be “monetary, fiscal or both”.
The unnamed officials quoted by the newspaper said that the talks are at an initial stage and nothing has been decided so far. “No formal proposal exists,” Bloomberg quoted Tarin as saying.
The stimulus options include incentives in collaboration with the central bank or packages targeted at the poor, it was reported. “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.”
Last week, Tarin had said the government would provide incentives for the agriculture sector in the budget. Those who pay taxes will not be burdened with additional ones, he had added. He had also lauded the construction package that provided incentives to the industry.
When incentive was given to the construction industry, the economy started to stabilise and the current account deficit curtailed, the minister pointed out. Economic growth started recovering this year as exports, agriculture, services sector and housing started to pick up, he had said.
“We have seen a 3.94 per cent increase in economic growth. It’s an inclusive and sustainable growth over a long period of time,” he had added.
Meanwhile, the government also decided to extend the regionally competitive energy tariff (RCET) regime for the export industry in the upcoming budget to provide Rs50 billion annual subsidy to the sector, sources said on Monday.
“The authorities concerned have agreed to provide the RCET to the export industry in the next financial year,” top officials at the commerce ministry confirmed.
Due to this extension, the textile export will surge to $16.5 billion by June 2021, which will help the country to take total exports to $27 billion in the current fiscal year and $30 billion in June 2021-22. In the next financial year, textile exports alone will go up to $20 billion because of the continuation of the RCET regime, officials claimed.