ISLAMABAD: Pakistan’s government said on Wednesday the country has developed a more sustainable debt profile and is now in a better position to borrow on competitive terms, after repaying a $500 million Eurobond issued a decade ago that matured on Sept. 30.
The South Asian nation faced a prolonged economic crisis in recent years that pushed it to the verge of a sovereign debt default in mid-2023, when foreign exchange reserves fell to critically low levels. To stabilize its position, Islamabad secured financial assistance from friendly nations alongside the International Monetary Fund (IMF).
Since then, Pakistan has implemented stringent economic reforms under IMF guidance, gradually improving macroeconomic indicators, which global credit rating agencies have also acknowledged.
“Pakistan has successfully repaid its $500mn International Bond (Eurobond) due on 30 Sep 2025 — as scheduled, in line with all its obligations,” Khurram Schehzad, adviser to the finance minister, said in a post on X, formerly Twitter.
“Issued in 2015 to global investors with a 10-year tenor, the bond matured on 30 Sep 2025,” he added.
Schehzad said timely debt servicing reflected the country’s commitment to financial discipline.
He noted that stronger external buffers, upgraded sovereign ratings and improved investor confidence — with bonds trading at a premium in recent months — underscored the progress.
Debt-to-GDP also fell from 77 percent in FY20 to 70 percent in FY25, while the external debt share of total public debt dropped from 38 percent to 32 percent.
“Looking ahead, easing global borrowing costs, alongside stronger fundamentals, position Pakistan to access markets on more competitive terms and continue building a more sustainable debt profile,” he continued.
The development comes as an IMF mission is in Pakistan to conduct a review under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF). The government is also assessing damage from recent monsoon floods that killed more than 1,000 people, destroyed homes and inundated farmland.
Economists say the international lender is likely to cut Pakistan’s growth forecast and adjust performance indicators in line with flood impacts.
If Islamabad clears the end-June 2025 review and meets agreed policy benchmarks, it will qualify for about $1 billion under the EFF and more than $100 million from the RSF.
