Pakistan is planning to issue yuan-denominated bonds this year to raise $200–250 million from Chinese investors over the next six to nine months, Finance Minister Muhammad Aurangzeb revealed during an interview at the Asian Financial Forum in Hong Kong on Monday. The initiative, advised by China International Capital Corporation, marks the country’s first attempt to tap into Chinese capital markets. The Finance Minister described the move as long overdue.
The target for the bond issuance has been slightly reduced from the $300 million projected earlier in 2024, according to Bloomberg. Aurangzeb expressed optimism about Pakistan’s economic trajectory, stating that the government is aiming for further credit rating upgrades to enter the “single-B” category, which would allow the country to reaccess global bond markets.
Pakistan is also working to meet the International Monetary Fund’s (IMF) conditions under a $7 billion loan program. The IMF is set to review the country’s progress next month, with a key demand being an increase in the tax-to-GDP ratio to 13.5 percent. Failure to meet these fiscal targets could jeopardize the release of the next $1 billion tranche of the loan. The Finance Minister emphasized the importance of long-term reforms in energy, taxation, and state-owned enterprises to break the cycle of debt dependency.
Economic indicators have shown signs of stabilization since Pakistan secured the IMF bailout last year. Inflation has eased, interest rates have dropped to a two-year low, and remittances and currency reserves have increased. The rupee appreciated by 2 percent in 2024, while the Pakistan Stock Exchange (PSX) outperformed other Asian markets significantly. The government is projecting GDP growth of 3.5 percent for the fiscal year ending in June, with inflation expected to stabilize within a 5–7 percent range over the next year.
