What does Pakistan’s $3bn return to global markets mean? — Experts weigh in

Strong investor demand has marked Pakistan’s return to international debt markets, with the country receiving nearly $6 billion in orders for a $3 billion Eurobond issuance. Federal Minister for Finance and Revenue Muhammad Aurangzeb called the issuance a “positive development,” saying it reflected renewed international investor confidence in the country’s economy.

But what is so special about this dual-tranche Eurobond deal?

Big deal for Pakistan

Speaking to Hum News Digital, business journalist and economist Khurram Husain calls it a “big deal” for Pakistan, given that just three years ago the country was on the brink of default.

“All creditors who had any exposure to Pakistan were rushing for the exits and withdrawing their money rather than lending more. So to have implemented stabilisation programs starting from July 2023, which then continued through the EFF that was signed in September of 2024, it has restored Pakistan’s creditworthiness and restored Pakistan’s access to global capital markets. And this particular bond flotation shows that the restoration is real, first of all, and second that it has actual depth, because the size of what Pakistan has raised is very large — $3 billion,” Husain said.

“I think the last time Pakistan raised something in this order of magnitude in a single offering would have been sometime, I think, in December 2017 perhaps, and even then it was $2.5 billion, I think. So this is a very large off-take, and it shows that there’s plenty of confidence in Pakistan’s stabilisation effort that’s been underway for three years now,” he said.

However, Hussain said the key question was how the government planned to use the funds, warning that although the money would quickly enter Pakistan’s coffers, it would not last long if used to drive economic growth in the same way as in the past. “It will last barely, you know, a matter of months it can be consumed. So, and the debt, however, will remain on the books for a long time,” he said.

For Husain, the bigger question was whether, after restoring Pakistan’s access to global capital markets through three years of difficult stabilisation efforts, the government had sound plans to use the funds productively. “Does the government have sound plans with which, through which to use this money for productive purposes? And for now, there’s not a whole lot of confidence on that front, frankly speaking,” he said.

Credibility over everything else

Economist Ammar Habib Khan, in conversation with Hum News Digital, said the more significant development was Pakistan’s return to international capital markets after a prolonged absence, noting that the country had not issued bonds or borrowed from international markets for some time, making the renewed access a positive signal for its credibility.

“When you borrow from one source, it opens the door to borrow from others as well,” Khan said, adding that the move suggested international investors were beginning to regain confidence in Pakistan. He said the development was therefore “more about building credibility than anything else.”

Meanwhile, addressing a “High-Level Dialogues on Taxation for Fiscal Sustainability”, organised by the Asian Development Bank (ADB) in collaboration with the Government of Pakistan, Aurangzeb said the transaction was the single largest in Pakistan’s history and part of a deliberate three-year debt-management strategy under the Global Medium-Term Note programme, rather than “an ad-hoc trade.”

Aurangzeb said Pakistan had received three rating upgrades since April 2025, with the Eurobond’s order book twice the size of the amount issued, and a diversified investor base spanning Asia, the Middle East, Europe and the US. He said the strategy aimed to repay expensive short-term debt, extend maturities and reduce rollover risk, with Sukuk, rupee-denominated dollar-settled bonds, and further Panda bonds also under consideration.