Govt rules out bilateral loans after ‘Saudi support’
• Aurangzeb says Pakistan to shift towards commercial borrowing
• Plans $250m Panda bond issuance in May; Eurobond, Sukuk issuances also under consideration
• Dismisses concerns over food, fertiliser shortages
• Expects economy to grow around 4pc this fiscal year
ISLAMABAD: Finance Minister Muhammad Aurangzeb on Tuesday said the government had no plans to seek more bilateral financing from friendly countries, stressing that Pakistan’s external position had stabilised following recent inflows from Saudi Arabia.
The minister made these remarks on the sidelines of the first high-level EU-Pakistan Business Forum in Islamabad, organised by the European Union in collaboration with the government, marking a key step towards strengthening bilateral economic ties.
He said that after securing $3 billion from Saudi Arabia, there was no immediate need for additional bilateral support.
Recently, Saudi Arabia pledged an additional $3bn in deposits for Pakistan and extended its existing $5bn facility for another three years. Pakistan subsequently received $2bn on April 15 and another $1bn on April 21 under the arrangement.
Mr Aurangzeb said the government was now shifting its focus towards commercial borrowing rather than relying on bilateral financing.
He added that Pakistan planned to issue a $250 million Panda bond, denominated in Chinese currency, in May, while the issuance of Eurobonds and Sukuk over the next two to three years was also under consideration.
The finance minister said the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) had provided guarantees for the Panda bond, and discussions with Chinese authorities were in their final stages. He said that he had also discussed the matter with his Chinese counterpart two weeks ago.
He said Pakistan also received gross inflows of $261m under the Roshan Digital Account (RDA) scheme in March and expressed optimism about higher inflows in April.
Responding to a question about the upcoming International Monetary Fund (IMF) executive board meeting next month, Mr Aurangzeb expressed confidence that Pakistan had met all the lender’s conditions and would receive a tranche of about $1.2bn under the $7bn Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF). He said he did not foresee any issues in the ongoing IMF programme.
The minister also dismissed concerns about potential shortages of food or fertiliser due to supply disruptions linked to tensions around the Strait of Hormuz following the now-paused US-Israeli war on Iran.
“We have to assess the impact of this conflict, but energy prices remain relatively low in Pakistan,” he said, adding that remittance inflows had remained stable over the past two months.
Mr Aurangzeb said the government had received budget proposals from various stakeholders, including trade bodies and chambers, which were now under review. However, he did not comment on a possible increase in the petroleum development levy or any relief measures for consumers in the upcoming budget.
‘Economy to grow 4pc’
Addressing the forum, which he also inaugurated, the finance minister said Pakistan’s economy was projected to grow by around 4pc in the current fiscal year, citing improving macroeconomic indicators.
He said the country had been consolidating gains, stressing that the current account posted a surplus of slightly over $1bn in March, which, according to the State Bank of Pakistan, was $23m in February.
Mr Aurangzeb also expressed satisfaction over the performance of IT exports, the positive trajectory in value-added sectors and rising remittances. He added that foreign exchange reserves were expected to reach around $18bn by the end of June, providing import cover of about three months.
Earlier this month, the ADB upgraded Pakistan’s economic growth forecast to 3.5pc for the current fiscal year. Data released by the National Accounts Committee showed the economy grew by 3.89pc in the October-December quarter of 2025-26, compared to 2.18pc in the same period last year.
Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan also addressed the forum, insisting that the EU remained Pakistan’s largest export destination, particularly under the GSP+ framework.
He emphasised that the future of the partnership lay beyond trade, focusing on investment, technological collaboration and integration into global value chains.
European Union Ambassador to Pakistan Raimundas Karoblis said the EU enjoyed strong economic relations with Pakistan and remained its top export destination.
“The purpose of the forum is not just to celebrate our trade relations, but to deepen, diversify, ‘green’, and transform them into long-lasting investments. Through this, our mutual prosperity will thrive,” the envoy said.
The forum brought together around 1,000 policymakers, business leaders, investors and financial institutions from Pakistan and Europe.
It also marked the launch of the EU-Pakistan Business Network, comprising over 300 European companies operating in Pakistan, aimed at facilitating dialogue and supporting new investments.
Participants discussed opportunities in key sectors, including agribusiness, digital innovation, green logistics, sustainable textiles and responsible mining, with more than 600 business-to-business meetings scheduled during the two-day event.
Published in Dawn, April 29th, 2026