ISLAMABAD  -  Federal Finance and Revenue Minister Senator Muhammad Aurangzeb hailed China’s positive response on Pakistan’s request to extend debt repayment periods for projects under the Belt and Road Initiative (BRI).

In an interview with Bloomberg, on the sidelines of the annual meetings of the International Monetary Fund (IMF) and World Bank, Aurangzeb said that the South Asian nation was looking to increase the maturities for debt taken for power plants to “create enough space” to lower electricity prices.

“We have just started that discussion and the response is encouraging,” Aurangzeb said, adding, “These are early days in terms of those negotiations.”

The former JP Morgan Chase & Co banker discussed debt with Chinese officials during a July visit to China.

Aurangzeb emphasised the need for Pakistan to maintain fiscal discipline and increase the tax-to-GDP ratio from below 10 percent to 13.5 percent.

Pakistan has been a regular borrower, having engaged in 25 programmes with the IMF. Ideally, the government plans to initiate discussions on obtaining additional financing from the IMF through its climate resiliency fund during the Pakistani delegation’s time at the meetings in Washington, he said.

To reach its goal, Pakistan will target sectors such as retail and agriculture, which have previously opposed taxation. The provinces will move forward with legislation related to agriculture by January, aiming to start tax collection by July, he added.

Pakistan has been a flagship destination for China’s Belt and Road Initiative, which has provided lending to developing countries and helped the nation overcome decades-long electricity blackout issues.

It is now seeking to extend the maturity of debt for nine power plants built by Chinese companies under the multibillion-dollar economic corridor.

Pakistan’s period of stability has seen consumer price increases decelerate to their lowest level in almost four years. The country’s short-term local government bonds are set for their first annual inflow from foreign investors in five years, buoyed by high yields and a stable rupee.

The benchmark stock index has risen 70 percent in the past 12 months, making it the world’s best performer.

Additionally, Pakistan’s central bank has cut its benchmark interest rate for three consecutive meetings by 450 basis points, reducing it to 17.5 percent from a record 22 percent. Aurangzeb indicated that the next meeting on November 4th may see the central bank further reduce the policy rate.