Debt servicing expenses may fall

Aurangzeb discusses fiscal strides with global financial leaders; hopes for credit rating upgrade

ISLAMABAD:

Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, noted that government financing costs are decreasing, which is expected to reduce debt servicing expenses.

During a meeting with representatives of S&P Global, the finance minister provided updates on macroeconomic stabilisation, fiscal consolidation measures, and developments in the external account, which are contributing to improved key indicators across the board. He expressed hope for an upgrade in Pakistan's credit rating by S&P Global, according to a press release from the finance ministry on Saturday.

In a separate meeting with Geoffrey Pyatt, the US Assistant Secretary of State for Energy Resources, the finance minister discussed challenges facing Pakistan's energy sector and ongoing reforms. He thanked the US government for its offer of support for the country's transition to renewable energy.

Aurangzeb also participated in a panel discussion at the high-level event "Growing Stronger: An Urgent Call to Improve Child Nutrition," organised by the World Bank. He highlighted the high incidence of child stunting in Pakistan, particularly in rural areas, and called for a multi-sectoral, government-wide approach to address the issue. He emphasised the need for reforms in taxation, energy subsidy reductions, and improved state-owned enterprise (SOE) management to create fiscal space for investments in climate change, population control, and child nutrition. He also thanked the World Bank for prioritising child stunting in the Country Partnership Framework for Pakistan.

The finance minister met with Masatsugu Asakawa, President of the Asian Development Bank (ADB), and appreciated ADB's partnership in supporting Pakistan's development goals, including the opening of a new ADB office in Islamabad. He expressed hope for the swift finalisation of ADB's Country Partnership Framework. Aurangzeb also praised ADB's completion of the Capital Adequacy Framework and the exemption for Pakistan from surcharges beyond exposure limits for the next three years.

He acknowledged ADB's support for a $500 million Policy-Based Loan for the Climate & Disaster Resilience Enhancement Programme, which will be reviewed by the ADB Board on October 29. Both sides agreed on the importance of domestic revenue mobilisation, regional cooperation, and the expedited completion of the ADB office in Islamabad.

In a meeting with Deemah Al Yahya, Secretary General of the Digital Cooperation Organisation (DCO), the finance minister highlighted Pakistan's potential in the ICT sector. He discussed the government's investment in a digital ecosystem aimed at improving governance, quality of life, and economic well-being, emphasising closer collaboration in areas such as digital infrastructure, the digital economy, foreign direct investment, digital skills, and digital governance.

During discussions with Dr Adnan Chilwan, Group CEO of Dubai Islamic Bank, Aurangzeb expressed appreciation for the bank's support in bridging Pakistan's financing gap. He informed that Pakistan's credit rating had recently been upgraded by Fitch and Moody's, and noted the government's plan to enter international capital markets through an inaugural Panda bond.