The government is in discussions with International Financial Institutions (IFIs) and the Kingdom of Saudi Arabia (KSA) to secure a substantial USD36 billion loan package aimed at servicing the burgeoning debt of the nation”s power sector.
This development comes as Pakistan prepares to tap into the Chinese capital market for the first time, with the finance minister announcing a planned $250 million Panda bond issuance by the end of January 2026, according to a report today.
Further international economic engagements include a prospective USD7 billion rail connectivity project set to be signed during the Kazakh president’s visit in February and an anticipated finalisation of an oil and gas investment by Azerbaijan’s SOCAR next month.
In efforts to revive key industries, Pakistan and Russia have established a 2027 start date for the revival of Pakistan Steel Mills (PSM). Separately, Pakistani and Chinese corporations have inked Memorandums of Understanding (MoUs) to develop crucial agricultural infrastructure, including silos and cold and grain storage facilities.
The government”s economic agenda also includes moving a major airport to the privatisation list. Speaking in Davos, the finance minister, Aurangzeb, emphasised that exports and the productive utilisation of debt are pivotal for economic growth. On the energy front, Pakistan is seeking a ten-year extension to implement the long-stalled IP gas pipeline project.
Meanwhile, the country”s foreign exchange reserves saw a modest increase of USD10 million. Domestic exporters, however, continue to face challenges, citing the high cost of doing business as a barrier to competing with regional rivals. To support the sector, Rs15 billion from the Export Development Fund (EDF) has been allocated for the Rice Exporters Association of Pakistan (REAP), with industry sources noting that financial losses impact all export categories, not just the rice trade.
In legal and administrative news, the National Assembly has passed the Income Tax Ordinance (Third Amendment) Bill, while Section 4B of the income tax law is facing a legal challenge over its lawfulness. A World Bank-funded project, the USD204.44 million PRIAT, received a satisfactory rating. Additionally, a new scheme promoting electric vehicles has been launched.
The Pakistan Stock Exchange reflected positive sentiment amidst these developments, as the KSE-100 Index climbed 655 points on Thursday to close at 187,688. Trading activity was robust with 1,066 million shares exchanged, primarily concentrated in the Power, Oil Marketing Companies (OMCs), and Banking sectors. Top performing stocks included ATRL, AICL, and ISL, while PGLC, BOP, and PSEL were the top decliners.