Debt Relief Talks: Pakistan’s Finance Minister, Muhammad Aurangzeb, arrived in Beijing on Thursday to discuss debt relief for the power sector alongside structural reforms suggested by the International Monetary Fund (IMF) .
Meeting with Chinese Counterpart: Aurangzeb held a meeting with his Chinese counterpart and is leading a delegation, including Power Minister Awais Leghari, to discuss proposals such as reprofiling nearly $15 billion in energy sector debt .
IMF Bailout: The IMF agreed on a $7 billion bailout for Pakistan’s heavily indebted economy, raising concerns over high rates of power theft and distribution losses that result in debt accumulating across the production chain .
Structural Reforms: The government is implementing structural reforms to reduce “circular debt” by 100 billion Pakistani rupees ($360m) a year, and Aurangzeb informed the Chinese side about the economic reform agenda, efforts to strengthen tax revenue generation, and energy and state-owned enterprise reform .
Impact on Bonds: As the meeting progressed, Pakistan’s bonds slid lower, with the 2036 maturity down 1.73 cents to bid at 73.05 cents on the dollar by 1415 GMT, according to Tradeweb data, its lowest since April.
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