Pakistan may offer as much as $1 billion of bonds and resume selling state assets in the coming months, Finance Minister Shaukat Tarin said, as the government forecasts a widening budget deficit amid rising war costs.
"We have made all the arrangements and we will conduct roadshows in the next couple of months," Tarin said in an interview in Singapore. The government may sell about $500 million each of euro-denominated and Islamic bonds, totaling no more than $1 billion, he said.
The country will try to sell state assets in the fiscal year starting in July after pausing for the past two years because of market conditions, he said after meeting investors to update them on Pakistan's economy.
Pakistan's budget deficit may widen to 5.3 percent of gross domestic product against a target of 4.9 percent in the year ending June 30 because of higher spending, including the cost of fighting militants in tribal areas, Tarin said. The country was forced to turn to the International Monetary Fund for a bailout to avert defaulting on its debt in 2008.
The cost of protecting against Pakistan defaulting on its bonds will probably fall from current levels as the government begins to market more debt, Tarin said.
Pakistan also plans to introduce a value-added tax to boost revenue in the next fiscal year, Tarin said. The state's revenue targets are "intact," he added.
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