State Bank expects economy to get back on pre-corona stability path

KARACHI: The State Bank of Pakistan (SBP) expected Pakistan’s economy to get back on the stability course it was moving before the COVID-19 challenges.

“The economy will resume along the path of stability and recovery on which it had made strong progress before the pandemic,” SBP Governor Reza Baqir said addressing overseas Pakistanis in a webinar.

Pakistan Embassy in Washington organised the session, according to a statement on Thursday.

The SBP governor said the decisive measures taken by the State Bank and the government before the COVID-19 pandemic had helped address the balance of payments crisis.

“In turn, these bold steps had placed the economy on a stronger footing, helping to provide room for policy action to combat the pandemic,” he said. He expressed confidence about the recent resumption of economic activity as COVID-19 cases have receded significantly.

The economic activity had come to a halt following lockdown related to coronavirus outbreak. Though the lockdown was lifted after five months, the growth outlook has already been marred. The growth is expected to decelerate to 2 percent for the current fiscal year of FY2021 and has contracted 0.4 percent in FY2020. Growth had slipped to 3.3 percent in FY2019 from 5.5 percent a year earlier.

Baqir said the SBP is committed to facilitating overseas Pakistanis to remain financially connected with their homeland.

“SBP is focusing on facilitating them by providing a secure and efficient financial system through digital means. The digital financial ecosystem would feature efficient and secure payment and banking systems in the country,” he said. “SBP and the government are actively working for further facilitation of overseas Pakistanis by increasing their access to financial markets of Pakistan.”

Ambassador of Pakistan to the US Asad Khan noted the significant role played by Pakistani American community, which is the third largest contributor of remittances to Pakistan.

“The Embassy and its Consulates General across the US remain in close contact with the Pakistani American community to regularly brief them on developments back home and to explore avenues for cooperation,” he said.

SBP Deputy Governor (Policy) Murtaza Syed said non-resident Pakistanis have been provided an opportunity to remotely open bank accounts in Pakistan entirely through digital means without visiting a bank in Pakistan or an embassy or a consulate office. The facility has been initially launched through 8 Pakistani banks. SBP would continue to add other banks in the list in future, he said.

Syed said Roshan digital accounts can be opened in rupee and a number of foreign currencies, which offer complete life style banking solution to account holders through digital channels.

“The digital accounts can be used for investment in government securities. In addition, the accounts enable investment in the Pakistan Stock Exchange, deposit products of banks and, in future, in real estate,” he said.

Syed further said the digital accounts could be used for payments and withdrawal in Pakistan or abroad. The funds available in these accounts including disinvestment proceeds will be repatriable, without any regulatory or bank approval.