WB approves $500m loan for Pakistan's budget support.

Byline: Khaleeq Kiani

ISLAMABAD -- The World Bank (WB) on Tuesday announced that it has approved another $500 million loan to Pakistan for the country's budget support following its increased expenditures on Covid-19 crisis response.

In a statement, the bank said its board of directors approved the financing for the Resilient Institutions for Sustainable Economy (RISE) programme to help Pakistan strengthen fiscal management, promote transparency and private sector growth and undertake foundational reforms in the energy sector to transition to low-carbon energy.

These reforms are critical to build fiscal resilience and stimulate recovery from impacts of the Covid-19 pandemic, it said. 'Pakistan is suffering a significant fiscal shock from the economic fallout from the pandemic and the increased spending on crisis response, including emergency healthcare, social protection, and business support,' said Illango Patchamuthu, the World Bank Country Director for Pakistan.

'The RISE programme supports the government efforts to achieve macroeconomic stability, accelerates long-delayed policy reforms, and sets the course for a strong and competitive economy,' he said.

The programme supports reforms to broaden the tax base and reduce distortions in tax policy, strengthen debt management and transparency, and implement urgently needed reforms to achieve financial viability of the power sector. In tandem, reforms to lower barriers to the formalisation of firms, increase the use of digital payments, and better regulate real estate developments will help create an enabling environment to attract private investment.

The RISE programme supports reforms such as harmonising sales tax and making the trade tariff structure more competitive.

'This could help the country attract new investments and spur economic recovery,' said Shabih Mohib, Lead Country Economist for the World Bank. Taken as a whole, the RISE programme could build a...

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