FinMin presses lenders to cut costs

Finance Minister Muhammad Aurangzeb and ITFC chief executive Adeeb Y Al Aama agreed, on the margins of the IMF and World Bank meetings held in Bangkok, to revisit terms on Pakistan's last outstanding financing tranche. Ministry of Finance statements issued Thursday said technical teams will look at adjustments that bring borrowing costs in line with improved market conditions. Both parties aim to reach a mutually agreeable outcome as Pakistan moves away from costly short-term loans toward longer maturities without raising external debt.

In talks with Chinese Finance Minister Lan Fo'an, the minister reviewed Pakistan's debut Panda Bond, which carried a 2.5% coupon and drew strong investor demand, backed by credit enhancement from AIIB. Both sides also touched on a return to the Eurobond market after four years and further issues under a RMB 7.2 billion programme. Separately, the minister met Moody's and welcomed the recent rating upgrade alongside better fiscal and external indicators.

Speaking with the Atlantic Council, the minister said tax collection grew 40% over two fiscal years, with the tax-to-GDP ratio near 10.3%. He also pointed to progress on privatising electricity distribution companies and outsourcing airports, while Rs838 billion has been earmarked for the Benazir Income Support Programme. He described a shift away from consumption-led growth toward investment and exports, and said Pakistan takes G-24 leadership on November 1.