—File Photo

International Monetary Fund has approved 1.386 billion dollars disbursement to Pakistan under the Rapid Financing Instrument to address the economic impact of COVID-19 Pandemic.

In a statement, IMF said with the near-term outlook deteriorating sharply, Pakistan swiftly put in place measures to contain the impact of the shock and support economic activity. It said crucially, health spending has increased and social support strengthened.

The IMF support will help provide a backstop against the decline in international reserves and provide financing to the budget for targeted and temporary spending increases aimed at containing the pandemic and mitigating its economic impact.

Following the Executive Board discussion, First Deputy Managing Director and Acting Chair Geoffrey Okamoto said the outbreak of Covid-19 is having a significant impact on the Pakistani economy. This has created an urgent balance of payments need.

He said in response to the crisis, Pakistan has taken swift action to halt the community spread of the virus and introduced an economic stimulus package aimed at accommodating the spending needed to tackle the health emergency and supporting economic activity.