Pakistan to issue first Panda bond next week as minister hails economic recovery

Pakistan is preparing to access Chinese capital markets through its first Panda bond issuance next week, the finance minister announced at a press conference on Saturday.

Speaking alongside Petroleum Minister Ali Pervaiz Malik, Muhammad Aurangzeb briefed the media on economic performance, external sector developments, and petroleum supply management amid ongoing regional tensions.

What is Pakistan's Panda bond and when will it be issued?

Pakistan plans to issue its first yuan-denominated Panda bond next week, marking a milestone in diversifying external financing.

The move follows Pakistan's recent return to international capital markets after four years, during which it raised $750 million through Eurobonds despite the prevailing regional conflict. The Panda bond issuance is part of a broader $1 billion plan backed by the ADB and AIIB.

What economic indicators did the finance minister highlight?

The Large-Scale Manufacturing sector registered 11% year-on-year growth in April, with cumulative growth of 6.5% during the first nine months of the fiscal year.

Aurangzeb expressed confidence that GDP growth would approach 4% in the current fiscal year, up from 3.1% last year. Exports rose 9% month-on-month and 14% year-on-year, driven by value-added textiles, IT, and other sectors.

Workers' remittances reached $3.5 billion in April, following $3.8 billion in March. Roshan Digital Account inflows surged to a historic $320 million in April, up from $260 million in March and the usual monthly range of $180 to $200 million.

Aurangzeb described the RDA performance as a strong vote of confidence by overseas Pakistanis in the country's economic direction.

What is Pakistan's foreign exchange reserve outlook?

The finance minister said Pakistan's foreign exchange reserves are expected to reach approximately $15 billion by the end of June, equivalent to three months of import cover.

He said the government's broader objective in pursuing macroeconomic stability was to facilitate industrial growth, support the opening of letters of credit, enable the repatriation of profits and dividends, and create employment.

Pakistan's oil import bill increased by over $1 billion between March and April, adding pressure to the external account.

How is Pakistan managing petroleum supplies amid regional tensions?

Petroleum Minister Malik said Pakistan remained among the few countries able to maintain stable fuel supplies despite disruptions to international shipping routes, including the Strait of Hormuz.

He acknowledged support from Saudi Arabia and Kuwait in facilitating petroleum supplies during the crisis. The government coordinated logistics through the National Crisis Management Cell with close engagement from international partners and embassies.

What fuel relief measures has the government extended?

Aurangzeb said fuel price adjustments were necessitated by international price movements, but the government introduced targeted subsidies for motorcyclists, public transport, and small farmers in consultation with provincial governments.

These subsidies have been extended for a third month under the prime minister's direction. He urged the public to conserve fuel, stressing that external account stability remains as important as fiscal management.

Both ministers warned that the ongoing regional conflict could have broader second- and third-order impacts on inflation, GDP growth, remittances, and exports, calling for continued vigilance and coordinated policy action.