Pakistan Receives Encouraging Response from China on Power Sector Debt Reprofiling
Finance Minister Muhammad Aurangzeb announced that Pakistan is receiving a positive response from China regarding the reprofiling of power sector debt. This promising news was shared during the annual meetings of the International Monetary Fund (IMF) and World Bank.
As discussions with China progress, Aurangzeb emphasized the importance of continuing structural reforms to stabilize the country’s economy. The potential debt reprofiling could provide Pakistan with more flexibility in managing its debt obligations and lowering electricity prices.
In addition to engaging with Chinese officials on debt reprofiling, Pakistan is also exploring additional financing options through the IMF’s climate resiliency fund. The government aims to create a conducive environment for the private sector and reduce government costs by streamlining ministries and federal positions.
Furthermore, to boost tax revenue, Pakistan plans to start taxing sectors like retail and agriculture by July 2025. Provincial governments are expected to advance legislation on agricultural taxation by January.
Looking ahead, the State Bank of Pakistan may further reduce the policy rate in the next Monetary Policy Committee meeting, following a recent cut due to improved inflation numbers.