Finance Minister Muhammad Aurangzeb has said that the country is preparing to debut yuan-denominated bonds this year.
In an interview with Bloomberg Television on the sidelines of the Asian Financial Forum in Hong Kong, Aurangzeb said: “The country is very keen, to tap the Panda bonds and the Chinese capital markets. We have been remiss as a country not to tap it previously.”
The country is considering raising $200 million to $250 million from Chinese investors over the next six to nine months which is slightly lower than the $300 million previously aimed by the minister who added that China International Capital Corporation was advising Islamabad on the issuance of Panda bonds.
His remarks come as the Prime Minister Shehbaz Sharif-led administration strives to expand the tax net and increase revenue generation in its bid to fulfil the conditions and targets set out by the International Monetary Fund (IMF) as part of the $7 billion Extended Fund Facility programme approved last year.
The country has witnessed some positive changes in the economic indicators such as the rise in foreign exchange reserves which reached a three-year high of $18.7 billion in November 2024.
With remittances reaching $3.1 billion in December, marking a 29.3% year-on-year increase on one hand, the country’s growth forecast has also been revised to 3% during the fiscal year 2024-25 as opposed to the previous figure of 2.8% projected in September 2024 by the Asian Development Bank (ADB).
Meanwhile, the State Bank of Pakistan (SBP) reduced the policy rate by 200 basis points (bps) to 13% — the lowest in two years — and is further expected to slash it in the policy meeting scheduled this month as reported by The News.
Speaking on the improved economic indicators, Aurangzeb said that the country was currently in the “phase of stabilisation” and would now have to focus on sustainable growth.
“We are now very focused to fundamentally change the DNA of the economy to make it export-led,” noted the minister.
The FinMin, while addressing the IMF’s scheduled visit next month, said that the Washington-based lender wants the country to broaden its tax base and reach a tax-to-GDP ratio of 13.5%, from 10% in December.
He said the economy was well on its way to achieving that target, not only because the IMF is saying that, but because the country needs to get into that benchmark to make the fiscal situation sustainable.
On the issue of the GDP growth, he said that it would increase to around 3.5% in the current fiscal year — against the 3.6% target set out by the government following a 2.5% growth in the previous fiscal year.
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