Pakistan plans to issue yuan-denominated bonds this year, aiming to raise between $200 million and $250 million from Chinese investors over the next six to nine months. This announcement was made by Finance Minister Muhammad Aurangzeb during an interview at the Asian Financial Forum in Hong Kong on Monday.
The move, recommended by China International Capital Corporation, marks Pakistan’s first attempt to tap into the Chinese capital markets. Aurangzeb described the initiative as a long-overdue step in the country’s financial strategy.
The Finance Minister also expressed optimism about future upgrades, with a goal to reach the “single-B” rating category in order to reenter global bond markets. The revised target of $200-250 million is a reduction from the $300 million previously projected for 2024, as reported by Bloomberg.
Focus on IMF Targets and Economic Stabilization
In addition to the bond issuance, Pakistan is focused on meeting the International Monetary Fund’s (IMF) conditions under a $7 billion loan program. The IMF is set to review Pakistan’s progress next month and has set demands, including increasing the tax-to-GDP ratio to 13.5 percent.
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Since securing the IMF bailout last year, economic indicators have shown signs of stabilization. Inflation has eased, interest rates have dropped to a two-year low, and remittances and currency reserves have risen. The Pakistani rupee appreciated by 2 percent in 2024, and the Pakistan Stock Exchange (PSX) outperformed Asian markets.
However, Pakistan must raise taxes to secure the next $1 billion tranche of IMF funding, or it risks missing fiscal targets for the year ending June 2025. Finance Minister Aurangzeb stressed the importance of long-term reforms in energy, taxation, and state-owned enterprises to break the cycle of debt dependency.
The government expects GDP growth of 3.5 percent for the fiscal year ending June, with inflation projected to stabilize within the 5–7 percent range over the next year.
