Federal Finance Minister Muhammad Aurangzeb has said that China has given an encouraging response to the request for re-profiling of energy sector loans.
Speaking to Bloomberg on the sidelines of the annual meetings of the International Monetary Fund (IMF) and the World Bank, he said, “We have just started talking and the response is encouraging. It is still early days in terms of negotiations.” ‘.
He said, “We have many programs, there are ups and downs, we have no choice but to continue structural reforms.”
According to the report, this development could potentially provide more breathing room for the country as Pakistan looks to build power plants and increase debt maturities to make room for lower electricity prices.
In July, it was reported that the finance minister was in talks with Chinese officials on proposed IMF structural reforms as well as reprofiling of energy sector debt.
The government and the IMF agreed on a 37-month long loan program in July, but according to the IMF, the disbursement of the loan was conditional on timely confirmation of necessary economic assurances from Pakistan’s development and bilateral partners.
According to the report, China recently rolled over $16 billion of its total debt of $26 billion in the current fiscal year that began in July, Mohammad Aurangzeb said, adding that the government’s IMF’s Climate Resilience Fund is considering initiating discussions for obtaining additional credit from
According to the report, when contacted, the Chinese Embassy in the United States apologized for commenting on the claim of Beijing’s positive response to Finance Minister Muhammad Aurangzeb’s debt reprofiling. and supports the continuation of economic stability.
Furthermore, Mohammad Aurangzeb said that the government knows that business cannot be done while in business and it is imperative to provide an enabling environment to encourage the private sector. Government expenditure is being reduced by abolishing ministries and eliminating one and a half lakh federal posts.
According to Bloomberg, Pakistan wants to postpone the maturity of loans of 9 power plants installed by Chinese companies under CPEC.
Talking about the increase in tax revenue, the finance minister said that Pakistan wants to collect tax from sectors like retail and agriculture from July 2025, these sectors have been opposing previous efforts to implement the tax, the finance minister further said in the interview. He said that the provincial governments will legislate in the agricultural sector.
Talking about the monetary policy, Mohammad Aurangzeb said that the State Bank may reduce the interest rate in the monetary policy committee meeting on November 4.
In September last month, interest rates were cut by 200 basis points to 19.5% as inflation fell to a 44-month low of 6.9% on the back of lower global commodity prices, higher domestic agricultural output and a stronger rupee. percent has come to 17.5 percent.
