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Inflation, current account deficit biggest challenges: State Bank chief


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RIYADH:-State Bank of Pakistan (SBP) Governor Dr Reza Baqir has identified inflation and current account deficit as two big challenges for Pakistan, expressing confidence that country would bravely weather the aforesaid challenges in future.

During an interactive session with the Pakistani Community in Riyadh, Saudi Arabia, on the Roshan Digital Account, Baqir termed COVID-19 the “biggest catastrophe for the world after World War II”, noting that with its high population density and under-developed healthcare system, Pakistan could have been affected very badly by the pandemic.

According to a joint statement issued by the SBP and the Embassy of Pakistan in the Kingdom of Saudi Arabia, Baqir lauded the professional approach adopted by the government, including National Command and Operation Center (NCOC), to rein in the multiple waves of the COVID pandemic with much lower loss of human life than in other countries.

He particularly highlighted the critical role played by the Ehsaas cash transfer programme, which has been globally recognised for its unprecedented coverage of the vulnerable population.

Highlighting the role of the SBP in helping the economy manage the fall-out from this global catastrophe, he said that several historic measures were rolled out in record time, providing relief to households and companies during COVID-19 equivalent to around 5% of the GDP.

“As a result, Pakistan’s economy only shrank by 1% in 2020, a much better outcome than in most of the rest of the world,” he claimed.

Baqir, expressed his gratitude to the Pakistani diaspora in the Kingdom of Saudi Arabia (KSA) for their tremendous support of the State Bank’s Roshan Digital Account (RDA) initiative.

He stated that RDA has proved to be a great success among the Pakistani community in KSA, who have opened the highest number of RDA accounts and sent the second highest amount of deposits among the 175 countries from which overseas Pakistanis have participated in RDA.

SBP chief informed the audience that since the launch of the scheme last September, 345,570 Roshan Digital Accounts have been opened by overseas Pakistanis and $3.44 billion has been deposited into these accounts.

Baqir also shared the key highlights of the country’s economy with the audience. He specifically highlighted three points that should give confidence to overseas Pakistanis about Pakistan’s economic outlook: first, the successful containment of multiple waves of the COVID pandemic; second, the preservation of Pakistan’s macroeconomic fundamentals through the COVID shock, including a reduction in the public debt-to-GDP ratio and a more than doubling of the country’s foreign exchange reserves; and, third, the proactive and coordinated policy response of the government and the SBP to provide support to the economy during COVID.

Speaking on the occasion, Ambassador of Pakistan to KSA, Lt. Gen (Rtd) Bilal Akbar said that despite the challenges posed by the COVID pandemic, remittances from KSA to Pakistan and trade and economic relations between Pakistan and the Kingdom are witnessing an upward trajectory.

He appreciated the initiative of RDA and expressed faith that it will not only help overseas Pakistanis in channelling their income to secure investments but will also provide much needed financial independence to their families in Pakistan.

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