Islamabad: Pakistan has successfully repaid its $500 million Eurobond on schedule, reinforcing its commitment to financial discipline and sending a strong signal to international markets about its improving economic fundamentals.
The Eurobond, issued in 2015 for a 10-year period, matured on September 30, 2025. Despite years of economic turbulence and debt concerns, the timely repayment has been hailed as a steady step towards sustainable recovery.
Taking to social media platform X (formerly Twitter), Adviser to the finance minister Khurram Shehzad confirmed the development that timely debt servicing remains business as usual, reflecting the country’s commitment to financial discipline.
Shehzad emphasized that the repayment coincides with positive macroeconomic indicators notably stronger foreign reserves, improved sovereign credit ratings, and a decline in external debt exposure. Pakistan’s sovereign bonds are now reportedly trading at a premium, signaling growing investor confidence.
According to the Finance Ministry, Pakistan’s debt-to-GDP ratio has improved from 77% in FY2020 to 70% in FY2025. Furthermore, the share of external debt in total public debt has declined from 38% to 32%, reducing the country’s foreign exchange vulnerability.
Debt growth has moderated sharply in FY25 versus earlier years, Shehzad stated, attributing it to more disciplined fiscal management and reforms.
The adviser added that as global borrowing costs ease, Pakistan is now better positioned to tap international markets on more competitive terms, further supporting its journey toward a more resilient and sustainable debt profile.
The milestone comes on the heels of Pakistan narrowly avoiding default in 2023 a year marred by dwindling foreign reserves, a balance-of-payments crisis, and a loss of market confidence.
The economic freefall was halted after Pakistan secured a critical bailout from the International Monetary Fund (IMF) and received financial support from China, Saudi Arabia, and the United Arab Emirates. These interventions stabilized reserves and unlocked room for policy reforms.
Since then, Pakistan has undertaken a series of tough IMF-backed structural reforms, from tax overhauls to energy pricing adjustments, to rebuild economic credibility.
In a strong vote of confidence, global rating agencies like Fitch Ratings, Moody’s Investors Service, and S&P Global Ratings have upgraded Pakistan’s outlook, citing fiscal discipline, external financing improvements, and a narrowing current account deficit.
Pakistan’s economic managers view this as a pivotal moment to capitalize on momentum, attract foreign investment, and maintain macroeconomic stability.
This is a steady step forward repayment as expected, but with stronger fundamentals, improved investor sentiment, and a more resilient outlook, said Shehzad.