Key points
- Pakistan is a good story: expert
- Eurobonds maturing in 2031 have doubled
- The Pakistan Stock Exchange index has tripled: report
ISLAMABAD: Barron’s has described Pakistan’s recent economic turnaround as a “macroeconomic miracle of sorts”, saying that Pakistan isn’t risky anymore.
While the American weekly magazine and newspaper published by Dow Jones & Company lauded the economic turnaround, it also underscored the fragility and deep structural risks the country still faces.
“The country of 255 million has pulled off a macroeconomic miracle of sorts over the past two years,” the Barron’s report said.
Macroeconomic stability
It highlighting key economic indicators suggesting macroeconomic stability, including a significant decline in the inflation rate from a record 38 per cent in May 2023 to 0.3 per cent in April 2025.
“Eurobonds maturing in 2031 have soared from 40 cents on the dollar to 80 cents. The Pakistan Stock Exchange index has tripled. Prime Minister Shehbaz Sharif’s government reached a $7 billion stabilization agreement with the International Monetary Fund (IMF) last September,” with over $2 billion already disbursed, highlighted the report.
The publication included expert opinion on the topic.
“Pakistan is a good story,”
“Pakistan is a good story,” Genna Lozovsky, chief investment officer at Sandglass Capital Management, which buys distressed emerging markets debt, told Barron’s.
“So good it’s not risky enough for us anymore.”
The report was of the view that the latest armed conflict with the neighbouring India “won’t likely knock Pakistan’s recovery off course”.
A sentiment shared by Finance Minister Muhammad Aurangzeb, who earlier told Reuters that the skirmish was a “short duration escalation” with minimal fiscal impact, stating it can be “accommodated within the fiscal space which is available to the government of Pakistan”.
Meanwhile, Barron’s noted that Pakistan remains largely dependent on international creditors, especially the IMF, and remains under the lender’s bailout programme.
Positive account balance
“Pakistan has been known for boom-and-bust cycles throughout its history,” notes Khaled Sellami, an emerging markets sovereign debt manager at Barings.
However, Sellami sees some signs that this time could be different. “The current account balance is positive, and they have a primary fiscal surplus [excluding interest payments],” he observed. “That’s something we haven’t seen in many years,” Sellami said.
“[Moreover] Pakistan’s sovereign creditors—China, Saudi Arabia and the United Arab Emirates—rolled over their loans without extending new credit. Gross domestic product growth bounced back to 2.5% last year, and the country’s books are uncustomarily balanced,” the report noted.
