ADB approves $300m loan to promote macroeconomic stability in Pakistan

The Asian Development Bank (ADB) has approved a policy-based loan of $300 million to help in promoting macroeconomic stability in Pakistan by aiding improved trade competitiveness and export diversification.

The ADB Principal Public Management Specialist Hiranya Mukhopadhyay said that the coronavirus pandemic came to Pakistan at a critical point in its macroeconomic recovery, however, Hiranya said that “the government’s ongoing efforts to ensure stability have started showing encouraging results this fiscal year. ADB’s program will support these efforts and help Pakistan to improve its export competitiveness—now more important than ever given the impacts of the pandemic.”

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According to a statement issued by the development bank, “ADB’s program will help Pakistan recover its current account deficit in a sustained manner and continue to facilitate export diversification”.

The statement said that the bank will introduce essential tariff and tax-related policy reforms to help in improving the country’s international competitiveness. The bank will also help to further strengthen key institutions of Pakistan, including accreditation bodies, the Export–Import Bank of Pakistan, and the Pakistan Single Window.

“The new financing falls under subprogram 2 of the Trade and Competitiveness Program. Under the first phase, ADB helped the government usher in key reforms, including reducing or abolishing tariffs and ad hoc duties on a large number of raw materials and intermediate goods. Several steps were also taken to introduce e-commerce, strengthen key institutions involved in facilitating trade, and enhance the export certification process,” the statement read.


The ADB bank further noted that since fiscal year 2004, Pakistan has recorded a rise-and-fall pattern of export growth reflecting the low performance in the country’s export industry and long-term decline in export competitiveness.

This is intensified by the loss of export growth momentum due to the strike of covid-19, which has reduced high-income countries’ demand for manufacturing goods and disrupted the supply of raw materials.