Pakistan’s Eurobond market has demonstrated notable stability, reflecting the country’s ongoing economic recovery and bolstering investor confidence. This positive trend is attributed to several key developments, including the disbursement of $1.03 billion under the International Monetary Fund’s Extended Fund Facility, which has reinforced fiscal and external stability, thereby enhancing investor trust.
As of January 2025, Pakistan’s inflation rate decreased to 2.4%, with the central bank’s policy rate adjusted to 12%. These measures have contributed to a more stable economic environment. The Pakistan Stock Exchange’s benchmark index surpassed the 90,000-point mark in October 2024, reflecting growing investor confidence in governmental policies.
While these developments are encouraging, challenges persist. Fitch Ratings has highlighted significant external financing risks, noting that Pakistan faces over $22 billion in external debt repayments in fiscal year 2025. To address these challenges, Pakistan has secured a $20 billion lending package from the World Bank, aimed at supporting economic reforms and ensuring long-term stability.
In summary, the stability of Pakistan’s Eurobond market, coupled with supportive economic measures and international assistance, has played a crucial role in enhancing investor confidence. Ongoing structural reforms and prudent fiscal management remain essential to sustaining this positive trajectory.
