Pakistan engages Moody’s amid plans for Eurobond, Panda bond

July 15, 2025 (MLN): To explore the Eurobond and other international debt markets as credit ratings improve, along with plans for an inaugural Panda bond, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb held a virtual engagement with Moody’s Rating Agency at the Finance Division.

The meeting also highlighted the successful arrangement of $1 billion in commercial financing from the Middle Eastern region.

He was accompanied by Minister of State for Finance Bilal Azhar Kayani, the Governor of the State Bank of Pakistan, and senior officials from the Finance Division, Revenue Division, and other relevant ministries.

They provided an in-depth briefing on Pakistan’s macroeconomic outlook, reform agenda, and financial stability, as per the press release issued today.

During the session, the Finance Minister apprised the Moody’s team of the significant strides Pakistan has made in stabilizing its economy and laying the foundations for sustainable and inclusive growth.

He underlined the successful completion of the final IMF review under the Stand-By Arrangement, including the disbursement of the second tranche and progress under the Resilience and Sustainability Facility (RSF), as key milestones that have restored confidence in Pakistan’s economic management.

The Minister highlighted a series of structural reforms undertaken by the government to anchor long-term stability.

These included prudent fiscal measures in the recently announced budget, tariff and trade liberalization geared towards export-led growth, and concerted efforts to rationalize expenditure.

The ongoing discussions with the United States on preferential tariff access were also noted as making encouraging headway.

Minister Aurangzeb and his team presented compelling evidence of macroeconomic recovery, including a sharp reduction in inflation, a cut in the policy rate, stabilization of the exchange rate, a current account surplus, and a surge in foreign exchange reserves crossing $14bn by the end of June.

Improvements in remittance inflows and export performance were also cited as signs of resilience and renewed investor confidence.

The Moody’s team was provided a comprehensive overview of Pakistan’s reform journey, with a particular emphasis on improving the tax-to-GDP ratio through technology-driven tax administration reforms, digitization of systems, and robust enforcement measures.

The Minister emphasized that under the direct oversight of the Prime Minister who chairs regular meetings on tax reform—the government was implementing measures to expand the tax base, plug leakages, and enhance compliance.

He noted that the Rs2 trillion revenue delta achieved this year had come through autonomous efforts, and the government was firmly committed to reaching a tax-to-GDP target of 13 to 13.5% in the next few years.

The Finance Minister also addressed queries from the Moody’s team and reiterated Pakistan’s commitment to staying the course on macroeconomic reforms, including in areas of privatization, restructuring of state-owned enterprises (SOEs), and right-sizing of government.

Looking ahead, Senator Muhammad Aurangzeb expressed optimism that the improving macroeconomic indicators and reform momentum would be positively acknowledged by rating agencies, further strengthening Pakistan’s case to tap international markets and deepen its external sector stability.

Pakistan, he affirmed, is ready to carry forward this journey of resilience, reform, and recovery to unlock long-term, inclusive, and export-oriented economic growth.

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