Govt plans policy support to offset coronavirus impact

The government is planning to offer policy support to offset impact of Coronavirus outbreak on manufacturing sector, instead of providing financial assistance at this stage, officials said.
The virus outbreak in China, which later spread across nearly 50 countries, has disrupted supply chain of major raw materials, posing threat to industrial output, especially that of major foreign currency earning sectors.
Prices of various raw materials and finished goods, which are mainly imported from China, have increased significantly, in some cases up to 50 per cent, in the domestic market.
Among others, local apparel manufacturers fear a massive blow to the sector for three to four months. The period may prolong, as the virus has spread to the United States and Europe, where the goods are mainly exported.
At this stage, a meeting at the Prime Minister's Office (PMO) last week discussed that manufacturing sector can be given policy support, so that it can offset the impact to some extent.
Prime Minister's Principal Secretary Dr Ahmad Kaikaus chaired the meeting, attended by secretaries of the Ministry of Finance (MoF), the Ministry of Commerce (MoC) and the Economic Relations Division (ERD), and the National Board of Revenue (NBR) chairman, among others.
The meeting was told that the Coronavirus outbreak may pose negative impact on liquidity, solvency and supply chain management. Some attendees opined in favour of providing support to small and medium enterprises (SMEs).
In the meeting, Commerce Secretary Dr Md Jafar Uddin said as local businesses imported their required raw materials before the Chinese New Year, there will be no shortage of input until March, sources said.
However, unless the Coronavirus epidemic can be contained immediately, the shortage of raw materials can be felt in April.
He also said opening of new letters of credit (LCs) in China began on February 24, creating hope for all.
Non-financial assistance will be needed for quick delivery of goods, brought against the LCs, he added.
Officials said the meeting has asked the NBR to take preparation for ensuring quick delivery of imported goods from ports.
The meeting has also asked the ministries and departments concerned to prepare short-, mid-, and long-term contingency plans to cope up with possible impact of the deadly virus outbreak.
The MoC has been asked to prepare a set of recommendations, in consultation with business bodies, to offset the impact at marginal level.
The central bank has also been asked to remain prepared for supplying additional funds, if needed for any sector, as an emergency support.

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