Pakistan’s economy showing ​signs of recovery despite Iran war: Finance minister

Finance Minister Muhammad Aurangzeb said on Saturday that Pakistan is set to enter Chinese capital markets for the first time through the launch of a yuan-denominated Panda bond.

Speaking at a press conference, Aurangzeb said the country was expected to make the move next week, describing it as a significant development for Pakistan’s financial sector.

The planned bond issue is valued at $250 million and will mark the first tranche of a broader $1 billion programme. According to the finance minister, the issuance will be backed by the Asian Development Bank and the Asian Infrastructure Investment Bank.

Aurangzeb said Pakistan’s economy was beginning to show signs of improvement, pointing to growth in exports and remittances despite regional instability caused by the conflict involving Iran and the closure of the Strait of Hormuz.

He noted that the situation has placed heavy pressure on Pakistan’s economy because of its dependence on imported fuel and gas.

The minister’s remarks came after the International Monetary Fund released around $1.32 billion in fresh funding to Pakistan under two ongoing loan programmes.

Aurangzeb also said the government was exploring other financing options, including Eurobonds and commercial borrowing, to help replace a $3.5 billion financial facility from the United Arab Emirates and support the country’s foreign exchange reserves.

He added that Saudi Arabia had agreed to provide an additional $3 billion in support to help bridge Pakistan’s financing gap.