Based on a newly developed macroeconomic model for Asia and the Pacific, this paper examines the socio-economic and environmental implications of an illustrative policy package that helps the region build forward better from the COVID-19 pandemic. Comprising of policy actions to provide basic social services, close the digital divide and strengthen climate and energy actions, this paper demonstrates that such a package not only raises economy-wide productivity but also reduces poverty and income inequality and cuts carbon emissions to a notable extent in the long run. This paper also examines public debt sustainability under different scenarios and stress tests. Given the large fiscal needs to build forward better and combat the pandemic, the simulation results show that debt vulnerability may rise steeply in the region’s less developed economies.