By The South Asia Times

ISLAMABAD - Pakistan is preparing to make a long‑awaited return to the global bond market after a four‑year absence, a step that signals growing confidence in the country’s economic recovery following a turbulent period that brought it close to default, Bloomberg reported.

Finance Minister Muhammad Aurangzeb said Pakistan will soon invite proposals from financial advisers as it evaluates issuing new sovereign debt overseas. Officials are considering several options, including bonds denominated in U.S. dollars, euros or Islamic sukuk, and are also moving forward with plans for the country’s first panda bond — a yuan‑denominated issue aimed at Chinese investors.

At the World Economic Forum in Davos, a delegation led by Prime Minister Shehbaz Sharif has been promoting Pakistan’s improved economic fundamentals to international investors, highlighting opportunities in sectors such as minerals, agriculture and technology. Accessing the global fixed‑income market is viewed by the government as an important step in bolstering foreign investment flows.

Aurangzeb told Bloomberg that Pakistan has “consolidated its gains” in macroeconomic stability, with key indicators such as inflation, interest rates, the fiscal balance and the current account all showing improvement.

The country has been largely absent from international bond issuance since 2022, when financial pressures and heavy borrowing needs forced it to rely on support programs from the International Monetary Fund. Through fiscal tightening and structural reforms, inflation — which once surged toward 40% — has eased to single digits, and Pakistan has reported a primary fiscal surplus. Credit rating agencies have responded with upgrades to the country’s outlook.

Aurangzeb said foreign‑exchange reserves are expected to reach a level equivalent to three months of imports by June — a widely accepted benchmark of external stability. He also noted the Pakistani rupee has remained stable for nearly 18 months, supported by a stronger balance of payments, sustained remittance inflows and growth in services exports.

Alongside macroeconomic progress, the finance minister said Islamabad has pushed ahead with long‑delayed structural reforms, including selling state‑owned enterprises and broadening the tax base. The national airline was privatized last month, and the government is exploring the sale of its stake in the Roosevelt Hotel in New York, outsourcing airport management and divesting nearly two dozen other companies.

Aurangzeb reiterated that shifting toward export‑led growth is a priority, saying it could help Pakistan avoid recurring balance‑of‑payments pressures tied to import‑driven expansions. “We have to stay the course on reforms,” he told Bloomberg. “That’s the only way to move toward sustainable growth.”