Pakistan has issued a three-billion-dollar dual tranche Eurobond.

The positive development was shared by Finance Minister Muhammad Aurangzeb while speaking at the High-Level International Dialogue on Taxation for Fiscal Sustainability in Pakistan organized by Asian Development Bank (ADB), in Islamabad today.

He said this dual tranche Euro bond is single largest transaction in the history of Pakistan, emphasizing it reflects the external validation the country has received from the rating agencies. He noted that Pakistan has secured three credit-rating upgrades since April last year.

He also highlighted the diversified nature of the investors spanning Asia, Middle East, Europe and the United States. He said the broad participation demonstrates renewed confidence of the international community in the economy of Pakistan.

Muhammad Aurangzeb said Pakistan is also looking at Sukuks and rupee-denominated dollar-settled bonds and Panda Bonds. He said these are aimed at repaying short-term expensive debt and reducing our rollover risks. 

The Finance Minister underscored that there is a certain level of sustainability in terms of our fiscal discipline. He mentioned that our fiscal deficit is now at a 22-year low and that we have had three years of consecutive primary surpluses.

Muhammad Aurangzeb reaffirmed the government’s determination to pursue structural reforms to ensure that the country does not return to the boom-and-bust cycles of the past. He said the tax to GDP ratio has increased from 8.1 percent to 10.3 percent, stressing that there is more to do in this regard.

Earlier, Chairman FBR Rashid Mahmood Langrial said they have undertaken fundamentally game changing reforms in the FBR in the last two and a half years. He said we have welcomed private sector expertise and brought in third party auditors. He said they are also launching IRIS 3.0 for which the design element has almost been completed.

Addressing the event, Minister of State for Finance Bilal Azhar Kayani said that domestic resource mobilization remains a critical national and fiscal priority for Pakistan. He highlighted the steps being taken to enhance the tax-to-GDP ratio.