Pakistan expects its gross domestic product (GDP) growth to reach 4% or higher during fiscal year 2026-27, while the government plans to diversify its financing sources through additional Panda bond issuances, Sukuk and a proposed rupee-denominated, dollar-settled international bond. Finance Minister Muhammad Aurangzeb outlined the economic outlook and financing strategy during meetings with international investors, financial institutions and development partners on the sidelines of the World Bank Group–International Monetary Fund Annual Meetings 2026 in Bangkok. He said the country’s recent fiscal performance, stronger foreign exchange reserves and renewed access to international capital markets reflected progress towards macroeconomic stabilisation. The government intends to use these developments to lower borrowing costs, extend debt maturities and reduce refinancing pressures while maintaining reforms under its International Monetary Fund-supported programme.
Speaking at the Citi Macro Forum Session, Aurangzeb highlighted three consecutive years of primary fiscal surpluses, a fiscal deficit at a 22-year low and improvements in foreign exchange reserves. These developments, he said, provide a basis for expecting economic growth to reach or exceed 4% in the current fiscal year. The government is also seeking to strengthen Pakistan’s access to international capital markets by introducing financing instruments that appeal to different investor groups. Further Panda bond issuances, Sukuk and the proposed rupee-denominated, dollar-settled international bond form part of this approach. Diversifying the sources of funding could help the government manage its financing requirements across different markets and maturities, although the eventual impact will depend on investor demand, borrowing terms and the successful execution of planned issuances.
The finance minister also outlined Pakistan’s ambition to enter the double-B sovereign credit rating category through sustained improvements in economic performance and continued implementation of structural reforms. During a meeting with S&P Global Ratings, he discussed the country’s economic progress, sovereign credit outlook and September bond issuance, which he said had attracted strong investor participation. He also highlighted improvements in tax collection, reserve accumulation and reductions in swap and forward liabilities. Discussions covered the importance of policy continuity, lower interest costs, stronger external buffers and consistent implementation of reforms. These factors are relevant to sovereign credit assessments because they influence a country’s ability to meet its financial obligations and manage external economic pressures. Aurangzeb reaffirmed the government’s commitment to fiscal discipline, sustainable export-led growth and reforms intended to improve Pakistan’s credit standing over time.
Debt management featured prominently in the minister’s discussions with international financial institutions and investors. During a high-level panel on mitigating sovereign risks in market-access countries, Aurangzeb highlighted fiscal consolidation, lower inflation and stronger foreign exchange reserves as important elements of Pakistan’s economic adjustment. He outlined measures to increase revenue collection, reform tax administration, control expenditure and advance privatisation. The government is also seeking to reduce financing costs, lengthen debt maturities and limit rollover risks through a broader range of funding instruments. Aurangzeb said renewed access to international markets could support improvements in the country’s external debt profile without increasing its overall size. He also emphasised that taxation, energy-sector changes, state-owned enterprise reforms and pension reforms require national ownership and consistent implementation to ensure that macroeconomic stability translates into sustained growth and better public welfare.
At an institutional investor roundtable organised by Jefferies International, Aurangzeb was accompanied by Finance Secretary Imdadullah Bosal and State Bank of Pakistan Governor Jameel Ahmad. The discussions covered Pakistan’s fiscal and external balances, financing instruments, privatisation and opportunities for business-to-business trade and investment. The minister reiterated the importance of broadening the tax base, strengthening digital enforcement and improving coordination between federal and provincial governments on fiscal matters. Agricultural income taxation and energy-sector reforms also featured in the discussions. Investors raised questions about geopolitical risks, energy security and liquefied natural gas obligations, alongside Pakistan’s economic engagement with the United States and Saudi Arabia. Aurangzeb reaffirmed the government’s intention to maintain reform momentum and encourage investment that supports productive economic activity.
A separate investor roundtable organised by Barclays focused on Pakistan’s financial markets, reform programme and opportunities for new investment. Aurangzeb highlighted consecutive primary surpluses, stronger reserves and renewed access to international financing, including private placements, Panda bonds and Eurobonds. He also discussed reforms affecting taxation, energy and state-owned enterprises, alongside privatisation and airport outsourcing. According to the minister, Pakistan has a strong pipeline of initial public offerings (IPOs), while foreign investors have shown interest in electricity distribution companies. The discussions also included monetary conditions, inflation and external stability, with the finance minister inviting SBP Governor Jameel Ahmad to address questions concerning the central bank’s policy environment. These discussions formed part of the government’s broader effort to attract international capital and expand investment opportunities in Pakistan.
At Standard Chartered Bank’s Sovereign Investor Roundtable, Aurangzeb again presented the government’s financing diversification strategy, including Sukuk, further Panda bond issuances and the proposed rupee-denominated, dollar-settled international bond. He linked these instruments to efforts to secure more favourable borrowing terms, extend debt maturities and reduce refinancing risks. Discussions also covered stronger foreign exchange reserves, inflation, the external economic outlook, energy security, targeted relief for vulnerable groups and climate financing. The minister stressed that the government intended to continue structural reforms and fiscal discipline while encouraging investment and exports beyond the duration of the IMF-supported programme. The proposed financing instruments are intended to broaden access to international capital, but their contribution to debt management will depend on their final structures, costs and market reception.
Engagement with development institutions also covered projects intended to support private-sector growth and infrastructure investment. In a meeting with Imad Fakhoury, Regional Vice President of the International Finance Corporation (IFC) for the Middle East and Central Asia, Aurangzeb discussed expanding support for small businesses, entrepreneurship, capital markets, and green and digital bonds. He reaffirmed Pakistan’s commitment to the Reko Diq project and acknowledged the IFC’s role in financing it. The discussions also covered mining infrastructure, value addition, affordable housing, developer financing, agricultural development, storage facilities, cold chains and electronic warehouse receipt financing. Other areas included livestock, pharmaceutical exports supported by stronger regulatory standards, water services, advanced electricity metering and public-private partnerships for infrastructure projects. These areas represent potential channels for mobilising private capital and supporting economic activity beyond government borrowing.
The finance minister also met with Ambassador Yon of the US State Department to discuss bilateral economic cooperation, progress towards a trade framework agreement and energy diversification through increased imports from the United States. The meeting covered measures to maintain fuel supplies and provide support to vulnerable consumers, alongside cooperation on anti-money laundering and counter-terrorist financing arrangements and follow-up with the Financial Action Task Force. Financing opportunities involving the US Development Finance Corporation and EXIM Bank were also discussed. Aurangzeb highlighted potential cooperation in critical minerals, investment in Reko Diq, project security and private-sector financing. Other subjects included Boeing aircraft acquisition and financing, aviation clearances, digital asset regulation and possible applications of tokenisation for remittances and Eurobonds.
The government’s economic agenda combines a growth ambition of at least 4% in FY2027 with efforts to improve fiscal management, diversify financing and attract investment across productive sectors. Further Panda bonds, Sukuk and the proposed dollar-settled international bond are intended to broaden financing options, while privatisation, tax reforms, energy-sector restructuring and export development remain central to the wider programme. The government is also seeking to improve Pakistan’s sovereign credit standing and deepen engagement with international investors and development institutions. Achieving these objectives will depend on continued policy implementation, the cost and availability of financing, external economic conditions and the ability to convert improved financial indicators into sustained investment and economic growth.
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