Pakistan govt now able to secure cheaper loans: official

The Pakistani government is now in a position to secure cheaper loans and borrow at preferred interest rates, Khurram Shehzad, Advisor to Finance Minister Muhammad Aurangzeb, said at a press conference on Monday.

He highlighted that the reduction in interest rates significantly lessened the burden of debt repayments. “This year, the government will need to repay PKR 8,500 billion instead of PKR 9,000 billion, reducing the debt burden by PKR 500 to 600 billion.”

Shehzad also noted that the decrease in inflation is a significant development. Tax revenues in the country are continuously increasing, and the government is maintaining economic discipline while negotiating the International Monetary Fund (IMF) deal.

By establishing economic discipline, the government is reducing expenses. “Over the past five months, the primary balance has been in surplus, and the share of taxes in the economy has improved by 1.5%.”

The advisor mentioned over the past year, the exchange rate of the dollar has remained stable, with the rupee strengthening by 4% against the dollar.

Last November, the dollar rate was PKR 289, which is now around PKR 278. This stability has boosted investor confidence.

In the last financial year, exports amounted to $12 billion in five months. This year, from July to November, exports exceeded $13 billion, marking real progress in maintaining a stable exchange rate while increasing exports.

He mentioned Pakistan's foreign exchange reserves are improving and now exceed three months' worth of imports. This improvement will increase the confidence of global rating agencies. Pakistan is now more capable of making external payments than before.

Moody's and Fitch have improved Pakistan's rating, acknowledging the improvement in the economy. The government has over $11 billion in reserves, which have increased by 57% in one year.

The improvement in the stock market is evidence of positive economic indicators. “The stock market is the clearest indicator of the economy, and its improvement will further boost investment.”

The government is aware of the challenges in economic reforms and is well-informed about issues in education and public health. Structural reforms will be ensured, with provinces playing a crucial role in education and public health.