- Consider raising $200-250 million from Chinese investors: minister.
- China International Capital Corporation advises on Panda bonds.
- Growing countries taxis/GDP ratio at 13.5%, he said.
HONG KONG: Amid the government’s strenuous efforts to stabilize the country’s economy after a rather tumultuous period, Finance Minister Muhammad Aurangzeb said the country was preparing to launch yuan-denominated bonds this year.
“The country is very keen to tap Panda bonds and Chinese capital markets. We were wrong as a country not to tap into them before,” the finance minister said in an interview with Bloomberg Television on the sidelines of the Asian Financial Forum in Hong Kong.
The country plans to raise $200 million to $250 million from Chinese investors over the next six to nine months, which is slightly lower than the $300 million previously targeted by the minister, who added that China International Capital Corporation advised Islamabad on the issuance of Panda bonds.
His remarks come as the administration led by Prime Minister Shehbaz Sharif strives to widen the tax net and increase revenue generation in a bid to meet the conditions and targets set by the International Monetary Fund (IMF ) under the $7 billion Expanded Financing Facility. program approved last year.
The country has seen positive changes in economic indicators, such as the increase in foreign exchange reserves which reached a three-year high of $18.7 billion in November 2024.
As remittances reached $3.1 billion in December, an increase of 29.3% year-on-year, the country’s growth forecast was also revised to 3% in fiscal 2024- 25, compared to the previous figure of 2.8% predicted. in September 2024 by the Asian Development Bank (ADB).
Meanwhile, the State Bank of Pakistan (SBP) has cut its policy rate by 200 basis points (bps) to 13% – the lowest in two years – and is expected to reduce it further at the policy meeting scheduled this month, as the newspaper reported. News.
Speaking on improving economic indicators, Aurangzeb said the country was currently in the “stabilization phase” and should now focus on sustainable growth.
“We are now very focused on the need to fundamentally change the DNA of the economy to make it export-driven,” the minister noted.
FinMin, during the IMF’s planned visit next month, said the Washington-based lender wants the country to broaden its tax base and achieve a tax-to-GDP ratio of 13.5 percent, up from 10 percent in December.
He said the economy is on track to achieve this target, not only because the IMF says so, but also because the country must achieve this target to make the fiscal situation sustainable.
On the issue of GDP growth, he said it would increase to around 3.5 per cent in the current fiscal year as against the 3.6 per cent target set by the government after growth of 2.5% during the previous financial year.