Finance Minister Muhammad Aurangzeb has said that the government plans to lower electricity costs as part of a broader plan to bring relief to manufacturers and increase exports, reported Bloomberg on Thursday.
His remarks come just days after the International Monetary Fund (IMF) staff reached a deal with Pakistan for a new $1.3 billion arrangement and also agreed on the first review of the ongoing 37-month bailout programme.
“Fundamentally, the DNA of the economy has to change to make it export-led,” Aurangzeb said, in an interview on the sidelines of the Boao Forum in China.
“On the energy side, we are working under the prime minister’s leadership to bring the tariffs down and the prime minister is going to make an announcement around that in the coming days.”
Electricity rates in Pakistan have skyrocketed in recent years, lowering grid demand while making the industrial sector uncompetitive regionally.
As per the latest estimates released by the Pakistan Bureau of Statistics (PBS) on Tuesday, Pakistan’s industrial sector contracted by 0.18% during the second quarter of the current fiscal year.
On Wednesday, Prime Minister Shehbaz Sharif, while chairing a meeting in Islamabad to review matters on the Power Division, announced that the government would soon unveil a comprehensive relief package aimed at reducing electricity costs for the public.
As per the Bloomberg report, the government is currently putting together a budget that broadens the tax base by including sectors such as real estate, retail and agriculture, Aurangzeb said.
“That could allow officials to reduce the burden on the manufacturing sector, which has been paying disproportionately high taxes,” he said.
On Wednesday, Aurangzeb informed that Pakistan is preparing to issue its first-ever Panda Bond in the Chinese market this calendar year.
“I have been advocating, and I am very keen, that Pakistan—taking advantage of the second-largest and deepest capital market in the world—goes for an inaugural Panda bond,” the minister said in an interview with China Global Television Network (CGTN).
“Pakistan has previously issued many bonds in US dollars and euros, but we have not tapped into the Chinese capital market. We are very hopeful that during this calendar year, we will do that.”
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