Prime Minister Shaukat Aziz said on Thursday Pakistan would look to increase borrowings from international debt markets now that its IMF loan programme was coming to an end. The International Monetary Fund on Wednesday completed its ninth and final review of Pakistan's three-year poverty reduction programme after disbursing about $1.31 billion.
The IMF said Pakistan had indicated it would not draw the final tranche of $262 million available under the loan and does not plan to seek a successor arrangement when the programme ends this month.
"Today is a defining moment for Pakistan's economy and its economic managers because we are now entering a new era, a world of more market-based fund raising and financial management," Shaukat Aziz told reporters in Islamabad.
Pakistan is expected to market its first sovereign Islamic bond soon in Europe, the Middle East and parts of Asia, looking to raise $500 million. It has selected Citibank and HSBC to jointly manage the issue.
Officials said Pakistan was planning more Eurobond issues.
"Pakistan will be an even more active player in the international capital markets and the recent upgrade by Standard & Poor's signifies the fact that our credit standing is improving by the day," the Prime Minister said.
Standard & Poor's Ratings Services upgraded Pakistan's long-term foreign currency rating in November by one notch to B+ from B.
Shaukat Aziz said the government expected gross domestic product to "meet or exceed" 6.6 percent growth target in the fiscal year ending June 2005.
In the late 1990's Pakistan's foreign exchange reserves were just a few hundred million dollars, sufficient to cover about two weeks of imports. Now they have ballooned to close to $12 billion.
Pakistani government sources said the IMF had waived the condition of post-programme monitoring under which it reviews the economic progress every six months.
IMF's Deputy Managing Director Augustin Carstens praised Pakistan's recovery from an economic crisis in the late 1990's but also identified the challenges the country faced, including weak social indicators and poverty.