Qudsia Bano

Following years of economic instability and dependence on emergency funding, the government’s initiative to access international markets via Panda Bonds and Middle Eastern financing signals its readiness to return to the global capital market—a move closely watched by rating agencies, reports WealthPK.

Industry observers believe this marks a turning point for Pakistan’s position in the global financial market. Fahad Javed, a capital market strategist at IGI Securities, said while macroeconomic indicators were improving, international investors would be closely watching the consistency of reforms. Confidence is not built overnight, and depends on continued discipline in areas such as government spending and tax administration, he emphasized.

Maham Imran, a research associate at the Foundation Securities, noted that the government’s signalling was strong but warned that investors were now more cautious due to global uncertainty and past inconsistencies. She said the most critical areas to watch would be progress on the state-owned enterprise (SOE) reforms and whether the government could stick to its fiscal targets without relying on excessive borrowing. Beyond expert feedback, several indicators support the government’s optimism.

The foreign exchange reserves have surpassed $14 billion as of the end-June; the current account has moved into surplus; and inflation has slowed, prompting the State Bank to reduce the policy rate. Remittances have increased, and exports are gradually recovering. The government is also targeting a tax-to-GDP ratio of 13 to 13.5 percent in the coming years, supported by digitalization and improved enforcement in the tax system.

The finance ministry’s assertion that Rs2 trillion in additional revenue was collected this year without external pressure suggests that internal reform efforts are beginning to yield results. The broader plan also includes reducing reliance on bailouts, shifting toward performance-based funding for public entities, and improving transparency in public financial management.

With reforms now tied to measurable outcomes and the government actively re-engaging with international markets, Pakistan hopes to mark a new chapter — not based on short-term fixes but on long-term credibility and growth.

Credit: INP-WealthPk