ISLAMABAD: Pakistan’s Finance Minister, Muhammad Aurangzeb, announced restrictions on property and vehicle purchases for non-filers, emphasising that difficult economic decisions are necessary for improvement. In a press conference in Washington, Aurangzeb stated that there is a need for legal coverage regarding non-filers, and Pakistan is moving to eliminate the non-filer category altogether. He highlighted ongoing efforts to raise Pakistan’s tax-to-GDP ratio from 9% to 13%, with inflation rates and the policy rate showing improvement as a result.
The finance minister pointed to steady progress toward macroeconomic stability, mentioning that all major rating agencies have positively noted Pakistan’s economic direction.
Aurangzeb added that discussions with the IMF were constructive, expressing hope that this would be Pakistan’s final IMF programme. He also noted that the World Bank intends to offer grants rather than loans.
Aurangzeb met with IMF and World Bank representatives in the U.S. and held talks with finance ministers from Saudi Arabia and other nations. He also reported growing interest among the American business community in investing in Pakistan.
Moroever, Pakistan announced on Saturday that it has requested an additional 10 billion yuan ($1.4 billion) loan from China, highlighting the ongoing external financing challenges Islamabad still faces.
Finance Minister Muhammad Aurangzeb met with China’s Vice Minister of Finance, Liao Min, and “requested the Chinese side to raise the limits under the Currency Swap Agreement to CNY 40 billion,” according to a late-night statement from the Ministry of Finance. Pakistan has already used the existing CNY 30 billion ($4.3 billion) Chinese trade facility to repay its debts and now seeks to raise this limit by an additional CNY 10 billion, translating to $1.4 billion at the current exchange rate.
The finance minister made the request on the sidelines of the annual meetings of the International Monetary Fund (IMF) and the World Bank.
If Beijing accepts, the total facility will reach approximately $5.7 billion.
However, this is not the first time Pakistan has made a similar request for an increased debt limit. Beijing has politely declined all such requests in the past. This latest request comes less than two weeks after China extended the current $4.3 billion (CNY 30 billion) facility for another three years. Pakistan and China had signed currency swap agreement during Chinese Prime Minister Li Qiang’s recent visit, extending Pakistan’s debt repayment period to 2027.
Pakistan has already fully consumed the existing $4.3 billion, or 30 billion yuan, trade finance facility under the China-Pakistan currency swap arrangement. The Ministry of Finance did not specify why it was seeking an additional $1.4 billion, particularly given that both the IMF and Pakistan previously claimed the required financing gap for the $7 billion programme had been met. –Agencies
