ISLAMABAD: Finance Minister Muhammad Aurangzeb has categorically denied any proposal to lower the retirement age of government employees to 55 years. Addressing the Senate’s Standing Committee on Finance on Wednesday, he dismissed the notion as baseless and clarified that no such plan is under consideration.
The committee meeting, chaired by Senator Saleem Mandviwala, included a detailed review of the terms of foreign loans obtained from the International Monetary Fund (IMF) and global commercial banks.
During the briefing, it was disclosed that the government secured a $7 billion loan from the IMF at an approximate interest rate of 5%, comprising a 3.37% SDR rate, a 1% margin, and 50 basis points as service charges. This loan is structured to be repaid over a 10-year period, including a grace period, with repayments scheduled semi-annually in 12 installments.
In addition to IMF loans, the government also borrowed from Chinese banks, including the China Development Bank and the Industrial and Commercial Bank of China, at interest rates ranging between 7-8%. Similar terms applied to loans from the ECO Trade and Development Bank and a joint loan facility.
Aurangzeb refuted claims of acquiring expensive commercial loans, stating that foreign borrowing would only occur when essential and on favorable terms for Pakistan. He assured the committee that the external financing gap has been addressed and pledged transparency in future loan agreements.
The minister also revealed plans to re-enter the international capital market, including issuing Panda bonds within the current fiscal year. Highlighting improvements in economic indicators, he noted a 49% year-on-year increase in vehicle sales as a positive sign of industrial recovery.
He further elaborated on the new IMF program, describing it as long-term and comprehensive, with some additional conditions. Talks with the IMF regarding climate financing are ongoing, with efforts to identify relevant projects under this framework.
By addressing the rumors about the retirement age and emphasizing fiscal discipline, Aurangzeb sought to provide clarity and reassurance regarding the government’s economic strategy.
