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IMF approves $1.4 billion aid package for Pakistan amidst virus spike

Pakistan's economy is in shambles due to the continuous spike in coronavirus cases and the closure of vital economic sectors. In this critical time, the IMF has announced a $1.4 billion aid package that would compensate for the losses the country has incurred.

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The International Monetary Fund (IMF) will provide around $1.4 billion to help Pakistan address the economic fallout of the coronavirus outbreak, the country’s central bank confirmed on Friday.

“IMF Executive Board approves a US$1.386 billion disbursement to Pakistan to address the COVID-19 pandemic,” the State Bank of Pakistan said in a tweet.

In a statement on Thursday, the global lender said the disbursement under its Rapid Financing Instrument will enable Pakistan “to meet the urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic.”

“The outbreak of COVID-19 is having a significant impact on the Pakistani economy. The domestic containment measures, coupled with the global downturn, are severely affecting growth and straining external financing. This has created an urgent balance of payments need,” said Geoffrey Okamoto, acting chair of the IMF Executive Board, in a statement.

“In this context of heightened uncertainty, IMF emergency financing under the Rapid Financing Instrument provides strong support to the authorities’ emergency policy response, preserving fiscal space for essential health spending, shoring up confidence, and catalyzing additional donor support.”

He also acknowledged Islamabad’s “swift action” to curb the spread of the virus and other measures to support citizens.

“Crucially, the authorities are increasing public health spending and strengthening social safety net programs to provide immediate relief to the most vulnerable,” Okamoto noted.

Read more: A Coronavirus guide to fixing Pakistan’s economy

Pakistan has already been included in the group of countries that can benefit from the G20 relief package, which includes time-bound suspension of debt service payments.

Cases spike as testing increases

With nearly 500 new cases over the past 24 hours, Pakistan’s overall coronavirus count crossed 7,000 on Friday.

The Health Ministry said 497 more people tested positive for COVID-19, raising the total to 7,027.

The death toll climbed to 135 after 11 more patients died, while recoveries are up to 1,765, the ministry added.

Over 1,500 cases have been confirmed in Pakistan over the past three days, which health experts believe is the result of increased testing capacity thanks to longtime ally China.

According to ministry data, 84,704 tests have been done so far in the country of over 210 million, with 6,264 over the past 24 hours.

Read more: IMF says coronavirus crisis may surpass the Great Depression: Can Pakistan receive further aid from the fund?

The novel coronavirus has spread to at least 185 countries and regions since emerging in China last December, with the U.S. and Europe being the worst-hit areas in the world.

More than 2.16 million cases have been reported worldwide, with the death toll above 145,500, and nearly 550,000 recoveries.

Anadolu with additional input from GVS News Desk.

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