Pakistan is beginning discussions with the IMF for Climate Resiliency Funding, and the Finance Minister has stated that reprofiled talks with China are positive as the country attempts to extend payment times.
China has responded positively to Pakistan’s request to extend the maturities of debt related to the Belt and Road program, the Finance Minister stated in a Bloomberg interview.
The nation wants to “create enough space” to reduce electricity, according to Muhammad Aurangzeb, by lengthening the maturities of debt taken out for power plants.
“These are the early stages of those negotiations,” he stated. The former banker for JPMorgan Chase & Co. visited China in July and spoke with Chinese officials about debt.
To avoid having to borrow from the IMF again, he said, the nation must continue to exercise self-control in order to raise the tax-to-GDP ratio from below 10% to 13.5%.
With 25 IMF programs, he said, Pakistan is one of the most frequent borrowers. While the Pakistani delegation is attending the conference in Washington, the government hopes to start talking about asking the IMF for more funding through its Climate Resiliency Fund.
Pakistan would target industries like retail and agriculture that have resisted past taxation initiatives in order to achieve its objective, he added. By January, the provinces of the country will begin working on agriculture-related laws, with the goal of beginning collection by July.
The central bank of Pakistan has lowered its benchmark interest rate by 450 basis points, from a record 22% to 17.5%, for three consecutive meetings, he added. The policy rate may be lowered by the Central Bank during its upcoming meeting on November 4.
