Pakistan's benchmark KSE-100 index hit an all-time high after the announcement of the $7 billion IMF bailout deal today. Economic indicators such as inflation, exports and remittances are also showing significant improvement as well. Speaking to reporters after the IMF deal, the Fund Managing Director Kristalina Georgieva acknowledged progress made by Pakistan. She said "The economy is on the sound path. Growth is up and inflation is down". The KSE-100 index rose in early trade to a record high of 82,905.73 points, before giving up those gains later in the day to close 0.7% down at 81,657. It still represents an annual gain of nearly 100%.
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| Pakistani Stock Market Outperforms Asian Peers. Source: Bloomberg |
Pakistan rupee has remained essentially stable at around Rs. 277 to a US dollar over the last year. Inflation has come down from 37% last year to less than 10% this year. Exports have climbed 10.54% ($2.921 billion) to $30.645 billion during the fiscal year 2023-24 compared to $27.724 billion in the corresponding period of 2022-23. Overseas workers' remittances have surged 44% to $5.94 billion in the first two months (July-August) of the current fiscal year 2024-25, compared to the same period last year. Current account deficit has declined to $681 million in FY24 from $3.275 billion in FY23. The budget deficit for the 2023–2024 fiscal year has been reduced to 6.8% of GDP from 7.7% in the previous year.
The stock market gains are driven primarily by the increasing profitability of the firms making up the index, in addition to improvement in macroeconomic indicators. The companies listed on Pakistan’s KSE-100 Index have reported their highest-ever earnings of Rs1.7 trillion in FY24, marking a 25% year-on-year increase from Rs1.3 trillion in FY23. In US dollar terms, profits after tax (PAT) rose 10% to $5.8 billion during the same period, according to data compiled by brokerage firm Topline Securities. Dividend payouts soared 30% as banking, fertilizer, and cement sectors led growth, according to media reports.
Pakistan has a long tough road ahead to carry out the reforms promised to the IMF in the latest bailout deal. Renegotiating unsustainable IPP (Independent Power Producers) contracts and carrying out long-delayed privatization of state-owned enterprises to reduce major drain on the taxpayers will not be easy, Boosting tax collection is not easy either. Offering incentives for savings, investments and exports while reducing budget deficits is a difficult feat. It will take a lot of fortitude, finesse and political will to get the results to improve the economy. Pakistani leaders' biggest challenge is to find a way to grow the economy to create enough jobs for the country's growing working age population. Failure to do so could cause major social unrest in the nuclear-armed country of 240 million people.
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50 comments:
I guess this isn't the first time the Pakistani stock markets have hit a "high" after a prolonged period of uncertainity about an IMF bailout. And it may not be the last time either, though every political setup in Islamabad who have signed up for an IMF bailout earlier have made unfulfilled claims and unrealized hopes of that bailout being the last the country needs to endure. Meanwhile, a few months back India's stock markets rose higher than the Himalayas on expectations of Modi govt sweeping the general elecions, and then plunged deeper than the oceans after results started showed him falling short of a majority, only to recover later when he managed to cross the half-way mark on the crutches provided by regional allies. If stock markets abhor something, it is instability and uncertainity. Beyond that its more of a merry ride that goes up and down on a whim, and is no reliable indicator of the underlying health of an economy. A country that is perpetually on life support from IMF can have its stock markets perform "better" over a period than far more stronger and stable economies (Pakistan and India), just as a country with a smaller and lesser industrialized economy can grow "faster" over a period than a neighbouring counterpart that is 6 times larger (India and China).
As you have mentioned, the structural weaknesses ailing Pakistan's economy go deep and requires sustained reforms that may come with political costs for the ruling setup, and the pertinent question is whether the current setup in Islamabad would show the courage and will to pursue them even at the risk of resentment from its votebanks and financial backers, or it would choose to kick the can down the road as its predecessors have done.
"Pakistani leaders' biggest challenge is to find a way to grow the economy to create enough jobs for the country's growing working age population. Failure to do so could cause major social unrest in the nuclear-armed country of 240 million people."
Why would that Pakistani nukes matter in this context? Are you suggesting that a major social unrest or instability in Pakistan could result in its nuclear arsenal falling into the hands of non-state actors?
Shehbaz lauds army chief for role in securing IMF deal
https://www.dawn.com/news/1861872/shehbaz-lauds-army-chief-for-role-in-securing-imf-deal
"Months ago, Finance Minister Muhammad Aurangzeb had made a similar statement, saying that China, Saudi Arabia and the UAE are crucial in helping Pakistan secure its IMF deal due to their potential to extend the maturity in debt owed to them."
"PM Shehbaz said that chief of the army staff himself went to a brotherly country to tell them that Pakistan’s IMF time is coming soon, and asked for their support."
Evidently, Pakistan is a nuclear-armed nation that needs a foreign diplomatic trip by its Army Chief to "friendly" and "brotherly" countries to secure to an IMF bailout. And here I am, an Indian, who needs to Google to find out who our Army Chief is!
Honestly, I am not exaggerating when I say that I do not know who India's current Army Chief is. He is hardly ever seen in the news. (The late Bipin Rawat was an exception.) Despite similarities in language, culture, societal and developmental issues, the military's oversized role in politics and economy of Pakistan is something I have never found easy to relate to as an Indian.
Okay, here is another.
COAS assures traders of road repairs, tariff cut
https://www.dawn.com/news/1861659/coas-assures-traders-of-road-repairs-tariff-cut
"Chief of the Army Staff (COAS) General Asim Munir has assured Karachi’s businesspersons of a reduction in industrial electricity tariff and repairs of roads in trading areas, according to a businessman with knowledge of the matter."
Doesn't Pakistanis see any oddity in their COAS being involved in such matters that have nothing remotely to do with their constitutional role in defending the country's borders? I can understand the military's dabbling with politics, but such open involvement in economic policy, electricity tariff and road repairs is beyond my comprehension. Its quite intriguing. Perhaps you can enlighten me why this is so?
Pakistan Economy Grows 3.07% Buoyed by IMF Loan, Lower Rates
Gross domestic product rose 3.07% in the three months to June from a year ago, the Pakistan Bureau of Statistics said Monday. That compares with a forecast of 2.7% in a Bloomberg survey of economists and a revised print of 2.36% in the January-March period.
https://www.bnnbloomberg.ca/business/international/2024/09/30/pakistans-economy-expands-307-buoyed-by-imf-loan-lower-rates/
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Pakistan’s economy grew faster than expected last quarter as funds from the International Monetary Fund and lower interest rates buoyed activity.
Gross domestic product rose 3.07% in the three months to June from a year ago, the Pakistan Bureau of Statistics said Monday. That compares with a forecast of 2.7% in a Bloomberg survey of economists and a revised print of 2.36% in the January-March period. For the financial year that ended in June, growth was revised to 2.52% from a reading of 2.38% earlier.
Pakistan was locked in a cycle of overlapping political and economic crisis that drove the nation close to default last year, but funds from multilateral lenders and loans from friendly countries have helped in stabilizing the country.
Foreign exchange reserves have strengthened from previously critically low levels, import and currency restrictions that hurt industrial activity have eased. Inflation has also cooled, helping monetary authority to lower borrowing cost by 450 basis points since June this year.
Last week, the government secured a final approval from the IMF for a fresh $7 billion loan program, that will bring certainty over financing over the next few years. The nation faces about $26 billion in loan repayments in the fiscal year started July.
The agriculture sector expanded 6.76% during the quarter on the back of a bumper wheat crop, while services sector expanded 3.69%, the data showed.
Prime Minister Shehbaz Sharif’s government has pledged to achieve a sustained growth by undertaking structural reforms in the economy. His administration forecasts an expansion of 3.6% in the year through June 2025.
Pakistan's Annual Consumer Price Inflation Slows to 6.9% in September
https://money.usnews.com/investing/news/articles/2024-10-01/pakistans-annual-consumer-price-inflation-slows-to-6-9-in-september
ISLAMABAD (Reuters) - Pakistan's annual consumer price inflation slowed to 6.9% in September, data showed on Tuesday, the lowest in more than three years, as the government seeks to implement IMF conditions that many households fear will hit them hard financially.
Annual inflation had slowed the previous month to 9.6%, the first single digit reading in more than three years.
Tuesday's data from the Pakistan Bureau of Statistics also showed that the monthly consumer price index in September stood at -0.5%.
"Due to aggressive monetary tightening, SBP (State Bank of Pakistan) has achieved in bringing inflation below 7% one year ahead of target," said Mohammad Sohail, chief executive officer at brokerage Topline Securities.
Pakistan's central bank has cut interest rates three times this year, saying it is confident that inflation is in check after it previously lifted rates to an all-time high of 22%.
In an economic outlook published last week the finance ministry said it expected annual inflation to decrease to 8-9% in September and October.
The International Monetary Fund approved a $7 billion loan programme for Pakistan last month that includes tough measures such as higher taxes on farm incomes and electricity prices.
The prospect of such moves has spurred concerns among poor and middle-class Pakistanis about higher prices after years of soaring inflation despite the recent downward trends.
Pakistan Is Only the Beginning of the Cheap Solar Revolution
By Ryan Cooper, managing editor at The American Prospect, and author of the book "How Are You Going to Pay for That?: Smart Answers to the Dumbest Question in Politics."
No need for expensive imported fuel when your energy is coming from the sun.
https://heatmap.news/economy/pakistan-solar
Pakistan imported a whopping 13 gigawatts of solar panels, mostly from China, in just the first half of 2024, mostly for rooftop installations for homes and businesses. That’s a mind-boggling amount of new solar for a country that only had about 50 gigawatts of installed generation capacity in total in 2023.
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Fuel imports are one of the largest expenses for even prosperous countries. For places like Pakistan, they are a punishing economic drain. Paying for vast amounts of imported coal, gas, and oil in scarce foreign currency is hard enough in good times, but it’s disastrous when one’s currency has depreciated by about 40% over two years.
Dirt cheap solar power could ameliorate or solve many of these problems at a stroke. Panels are now so cheap, even Pakistan can afford to import them by the millions — an expense, yes, but a one-time one. And while solar is inherently intermittent, and therefore not a solution to Pakistan’s reliability problems, batteries are also plummeting in price — down about 90% between 2010 and 2023 — and can help balance out supply. Cheaper batteries also mean cheaper EVs, with (as usual) Chinese models coming out at bewilderingly low prices. And because Pakistanis mostly drive motorcycles (often manufactured domestically) over relatively short distances, electrifying the personal vehicle fleet there will be far cheaper than in America or Europe; vastly smaller batteries require vastly simpler charging infrastructure.
If all goes well, this will free up vast amounts of economic capacity for Pakistan to invest in domestic development. Businesses will have stable, reliable power supplies that will justify more investment. Households will be able to upgrade their insulation, install heat pumps, and generally spend more on things other than energy. The government will be able to upgrade legacy transmission lines to accommodate solar production from the remaining hydro and nuclear plants.
Finally, of course, there is the climate benefit. Pakistan is one of the countries most threatened by climate change. Summer heat waves are bad and getting worse, to the point where murderous wet bulb events are increasingly likely. Catastrophic warming-fueled storms in 2022 caused the worst flooding in the country’s history, inundating about a third of Pakistan’s land area, killing nearly 2,000 people and causing billions of dollars in damages.
In short, a path to economic development will be opened. It is by no means guaranteed, but it will be a heck of a lot easier than trying to dig out from under the debt mountain of the collapsing coal-powered system. Look around the developing world and you’ll find there are a great many nations in similar situations.
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Tax collection increased by 32% YoY to PKR 1,100bn during Sep’24
Tax collection for the month of Sep’24 increased by 32% YoY to PKR 1,100bn against a target of PKR 1,098bn. On MoM basis, tax collection increased by 38% in Sep’24
During 1QFY25, FBR collected revenue of PKR 2,556bn, up by 25% YoY. The collected amount is PKR 96bn short than the target of PKR 2,652bn.
https://x.com/ArifHabibLtd/status/1840975573146890642
Good news, Brofessor sb. Solar power is indeed a blessing and the fact that Pakistan has zillions of hectares of barren wasteland blessed with ample sun and wind is a gamechanger if it can be utilised. Energy and food are two of Pak's large and unnecessary imports. Solar power and even bringing up the productivity of farmlands to Indian Punjab standards would wipe out much of the CAD. Regards
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KSE100 Index recorded its highest-ever closing at 82,722
KSE-100 index went up by 755 points (+0.92% DoD) to close at 82,722 pts.
https://x.com/ArifHabibLtd/status/1841801335013859417
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AHL reported that this surge in sales is attributed to rising demand alongside a notable decline in the prices of Motor Spirit (MS) and High-Speed Diesel (HSD), which fell by 20.19% and 20.06% year-on-year, respectively.
https://x.com/ArifHabibLtd/status/1841701062866051564
Petroleum product sales surge 20% in September fueled by increased demand
https://profit.pakistantoday.com.pk/2024/10/02/petroleum-product-sales-surge-20-in-september-fueled-by-increased-demand/
Pakistan's petroleum consumption hits 1.27 million tons, driven by falling prices and robust petrol and diesel offtake
Petrol sales saw a remarkable 22% year-on-year rise, totaling 0.63 million tons in September 2024, up from 0.52 million tons the previous year. Meanwhile, HSD dispatches surged by 25% year-on-year, reaching 0.49 million tons in the same month.
Conversely, Furnace Oil (FO) sales experienced an 18% decline, dropping to 0.07 million tons due to diminished demand for FO in power generation, compared to 0.08 million tons in September last year.
On a month-on-month basis, petroleum product offtake increased by 5% from August’s 1.22 million tons, attributed to lower demand in August due to heavier rainfall.
For the first quarter of FY25, total petroleum product sales fell by 3% year-on-year to 3.68 million tons, compared to 3.81 million tons in the same period last year. While sales of HSD and FO declined, petrol sales remained stable, with volumes recorded at 1.85 million tons for petrol, 1.42 million tons for HSD, and 0.21 million tons for FO.
Company-wise, Pakistan State Oil (PSO) reported an 8% increase in offtake for September 2024, totaling 0.55 million tons. Additionally, HASCOL and Shell Petroleum saw substantial growths of 76% and 17% year-on-year, respectively, while Attock Petroleum Limited (APL) experienced an 8% decline in dispatches.
Dear Sir
Thanks for sharing this, Sir have you seen the recent speech of the foreign minister of India Mr. Jaishanker in UNGC? He says that Pakistan has nothing good to do and offer, he further said that the only GDP( Gross Domestic Product) which Pakistan has is radicalization and the only thing Pakistan exports is terrorism.
It clearly shows ignorance on the part of Indian side but the question is Sir that don't the authorities in Pakistan specially the prime minister of Pakistan and his delegations have enough knowledge about how to respond to these Indians?
Doesn't the government of Pakistan even knows that recently the professors of economics in the universities of America and in other western countries have said that it is not just GDP which shows real progress and development of a country but in fact it is GDP per capita which shoes real development and progress of a country . In inclusive development index released by WEF each year, India is ranked well below Pakistan at number 162 or 163 as far as I remember and Pakistan is ranked at number 148. This index clearly shows that no matter how big the economy of India is and how fast it's GDP is growing but inspire of that their government has failed to translate the economic growth of their country for the well being and welfare of its people unlike Pakistani authorities that have performed much better than India in this aspect relatively.
Dear Sir
Their are many MPs or MNAs in UK and with each MP and MNA their is a researcher who guides them on several matters specially on the matters of economy.
Indian government has far as I know has board of economic advisory Council and the Chief of economic advisory Council guides Indian PM on matters of economy and it's decisions. Does government of Pakistan has any such position?
Danish shipping giant Maersk has announced a significant $2 billion investment in Pakistan’s port and transport infrastructure over the next two years. This investment aims to contribute to the country’s infrastructure development and drive economic growth, according to a state-owned news agency.
https://www.globaltrademag.com/maersk-commits-2-billion-to-boost-pakistans-port-and-transport-infrastructure/
As part of this initiative, Pakistan’s Minister for Maritime Affairs, Qaiser Ahmed Sheikh, is scheduled to visit Denmark this month to sign a Memorandum of Understanding (MoU) between Maersk Shipping Company and Karachi Port Trust.
This announcement follows the recent commitment by Abu Dhabi Ports Pakistan CEO, Khurram Aziz Khan, who unveiled a $250 million investment in Karachi Port over the next decade during a meeting with Prime Minister Shehbaz Sharif. Khan also outlined plans for a $130 million investment in a state-of-the-art multipurpose terminal, expected to be completed within two years. Enhancements to the container terminal facility at Karachi Port will include automated gates, an expanded berth, a crane rail track, and additional infrastructure upgrades.
UNGA is merely a talk shop and I don't think anyone over there bother to listen to (or care about) the barbs that Indians and Pakistanis routinely trade against one another. When Pakistan pokes India about Kashmir or its treatment of Muslims, India returns the favour by highlighting Pakistan's history of sponsoring and harbouring jihadi terror groups and its leaders and the sorry state of its economy. Having said that, it is reality that a country that teeters on the brink of bankruptcy every three years, and then barely managing to scrape it through by IMF bailouts and pestering "brotherly nations" for cash handouts cannot command respect or influence among the international community. The social development indicators and per-capita numbers of both India and Pakistan are equally pathetic (even if one country scores a bit higher or lower than the other in some indices), but the saving grace for India is that its a far more stable and faster growing economy with stronger macro-economic fundamentals and more prudent financial management.
Ahmed, perhaps a more pertinent question that needs to be answered first would be: who really runs the show as regards to the economic policy matters these days in Pakistan (besides IMF, that is)?
Is it (a) the figurehead Prime Minister, (b) the Finance Minister, (c) the acting Foreign Minister (and ex-Finance Minister) who does his best to sideline and undermine the afore-mentioned Finance Minister, or (d) the COAS himself?
Arif Habib Limited
@ArifHabibLtd
Remittances increased by 29% YoY to $ 2.8bn during Sep’24
Remittances by overseas Pakistanis increased by 29% YoY to USD 2.8bn during Sep'24 compared to USD 2.2bn during Sep’23. On MoM basis, remittances decreased by 3%.
In 3MFY25, remittances increased by 39%YoY to USD 8.8bn.
https://x.com/ArifHabibLtd/status/1843884748168478837
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https://tribune.com.pk/story/2501681/pakistan-sees-388-increase-in-remittances-from-overseas-workers
In the first quarter of fiscal year 2025, overseas Pakistanis sent a total of $8.8 billion back to Pakistan, marking a significant increase of 38.8% compared to the same period in fiscal year 2024.
Overseas Pakistanis sent an impressive $2.849 billion back to Pakistan in September 2024, reflecting a notable 29% increase from $2.208 billion in the Septermber 2023, Express News reported. Despite this positive trend, remittances saw a slight decline of 3% compared to August 2024, when the total was $2.943 billion
The average monthly remittances from workers over the three months amounted to approximately $2.92 billion.
Pakistani workers in Saudi Arabia were the largest contributors in September 2024, sending $681.3 million. Although this figure is a 4% decrease from August, it still represents a 27% increase from the $538.3 million sent in September of the previous year.
In contrast, remittances from the UAE showed an upward trend, rising by 4% from August, from $538.4 million to $560.3 million. Year-on-year, this figure jumped significantly by 40%, compared to $399.8 million in September 2023.
Pakistani workers in the United Kingdom sent $423.6 million in September 2024, which was an 11% decrease from August. However, this amount still signifies a 36% increase compared to last year.
The case for agriculture exports - Business - DAWN.COM
https://www.dawn.com/news/1845946
In 1990, Pakistan’s exports-to-GDP ratio was around 14.8pc, which was significantly higher than that of China, India, and Bangladesh. Over the last three decades, these countries have predominantly experienced export-led growth, resulting in increased exports-to-GDP ratios of 19.7pc, 21.9pc, and 13.2pc, respectively, in 2023, as per World Bank data.
Unfortunately, due to flawed economic policies and the misplaced priorities of successive governments, Pakistan has bitterly failed to achieve export-led growth. Particularly during the Nawaz Sharif regime (2013-2017), the dollar exchange rate was artificially capped at Rs100 for four years. This policy made imports cheaper, leading to a surge in imports while exports declined.
In fact, the policy shook the very foundation of Pakistan’s export sector and disrupted the value chains of exportable products. While the intention was to keep inflation in check and to win the country’s next election — a short-term political gain — it came at the expense of long-term export growth. Consequently, Pakistan transitioned to a consumption-based economy, and the business community shifted its investment focus from manufacturing to trading and real estate sector.
The government, however, continued to collect taxes and duties on imports — a hassle-free method of tax collection and boosting revenue — without acknowledging that it came at the cost of a massive current account deficit. As a result, Pakistan’s export-to-GDP ratio decreased from 12.2pc in 2013 to 8.2pc in 2017, according to World Bank data.
Now, with the exception of some niche markets, Pakistan is struggling to increase its exports. The manufacturing sector feels incapacitated in maintaining its competitiveness in global markets due to a high policy rate of 20.5pc, electricity costs three times higher than those in neighbouring countries, and, to top it all off, frequently changing trade policies and tax regimes.
Historically, our manufacturing sector, particularly the textile sector, has relied on the government’s subsidies and incentives, which have hindered productivity, product diversification, and product quality improvements to the level needed to compete in global markets.
As the government withdraws these tax-related concessions and other incentives due to the financial crisis, manufacturers and exporters openly state that they will relocate their businesses to other countries, offering better incentives and a business-enabling environment.
However, amidst these economic challenges, the business environment, and current government policies, agriculture and information and communication technology (ICT) are the two sectors that can be relied upon for export growth, even during the current economic stabilisation phase.
Agriculture and IT are relatively less capital-intensive and do not require significant energy inputs. Their electricity needs can be efficiently met through solar power for offices and tube wells. Moreover, contrary to manufacturing, their turnaround period is in months, not years.
These sectors also offer another significant advantage: unlike the manufacturing sector, they are not heavily reliant on imports. Consequently, when they export, there is no corresponding considerable increase in imports.
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*Macroeconomic indicators in Pakistan show signs of significant improvement during FY25-todate*
* With Sep’24 recording a 44-month low inflation of 6.9%, average inflation in 1QFY25 dropped to 9.2% (compared to 29.0% in 1QFY24), driven by lower food prices, high base effect, and reduced global commodity prices.
* As inflation eased, the policy rate was lowered to 17.5% by the end of Sep'24, leading to a substantial drop in money market yields across all tenors, which now range between 12-15%, down from last year's peak of 23-25%. This marks the lowest level since 3QFY22.
* External account improved as the current account deficit declined, supported by exports reaching USD 7.9bn, the sixth highest quarterly figure in 1QFY25.
* SBP foreign reserves increased to USD 10.8bn —the highest since Apr'22. This rise in reserves has played a crucial role in stabilizing the PKR against the USD, which slightly appreciated by 0.23%.
https://x.com/ArifHabibLtd/status/1845002219650781359
Chinese premier opens trip with joint opening of Beijing-funded New Gwadar International Airport ahead of two days of SCO meetings
https://www.scmp.com/news/china/diplomacy/article/3282458/chinas-li-qiang-vows-upgraded-pakistan-economic-corridor-first-visit-islamabad
Premier Li Qiang reiterated China’s pledge to upgrade a multibillion-dollar economic corridor with Pakistan and deepen joint counterterrorism efforts with its military as he arrived in Islamabad on Monday.
Li, who is on his first visit to the South Asian country as premier, will be attending a Shanghai Cooperation Organisation heads of government meeting in the Pakistani capital during his four-day trip.
“China is willing to work with Pakistan, focusing on establishing an upgraded version of the CPEC,” Li told Pakistani Prime Minister Shehbaz Sharif on Monday, according to the Chinese foreign ministry.
The China-Pakistan Economic Corridor (CPEC) is a flagship project under Beijing’s Belt and Road Initiative, with more than US$65 billion pledged for projects in Pakistan as of 2022.
Formally announced in 2013, the 3,000km (1,864-mile) route of infrastructure projects aims to connect landlocked western China to the Arabian Sea via Pakistan’s deep sea Gwadar Port.
Earlier, Li and Sharif inaugurated the Beijing-funded New Gwadar International Airport in a televised virtual ceremony.
The Chinese premier described the airport as a key facility for the Gwadar Port to become a regional connectivity hub and an important symbol of the further deepening of the construction of the CPEC.
Gwadar lies on the southwestern coast of the Pakistani province of Balochistan, near the Iranian border, where there has been a long-running insurgency.
“We aim to accelerate the construction of major projects in areas such as railways, roads and ports, and strengthen industrial integration,” Li said.
He also pledged to “deepen practical cooperation in agriculture, mining, information technology and energy, ensuring that the results of China-Pakistan cooperation benefit the people more broadly”.
Sharif said that the Gwadar International Airport marked “another symbolic representation” of the friendship between Pakistan and China, and the new facility would “fully unleash the hub functions” of Gwadar Port, bringing “unprecedented” development opportunities to Pakistan.
Later in the day, Li met Pakistani military leaders, telling them that China hoped to deepen counterterrorism cooperation towards jointly safeguarding peace and stability.
Military leaders present at the meeting were Chairman of the Joint Chiefs of Staff Committee of the Pakistan Army Sahir Shamshad Mirza, Chief of Army Staff Asim Munir, Chief of Naval Staff Naveed Ashraf and Chief of Air Staff Zaheer Ahmad Babar.
Pakistan has sought to bolster security for thousands of Chinese workers in Pakistan following a surge in militant violence targeting Chinese nationals and Chinese-funded belt and road megaprojects.
Security fears spiked ahead of Li’s visit, after a deadly attack on Chinese nationals near Jinnah International Airport in the southern city of Karachi.
Two Chinese workers were killed and several others were injured in the attack claimed by the separatist militant group Baloch Liberation Army, a group that has targeted Chinese interests in Pakistan before.
Li told Sharif: “We hope that Pakistan will continue to provide a favourable business environment for Chinese enterprises and fully ensure the safety of Chinese personnel, institutions, and projects in Pakistan.
“China firmly supports Pakistan’s counterterrorism efforts and is willing to actively promote counterterrorism cooperation, helping Pakistan to strengthen its counterterrorism capacity building.”
Sharif once again expressed “deep condolences” for the Chinese victims in the latest attack and pledged to “make every effort to apprehend the perpetrators” and enhance counterterrorism measures.
Chinese premier opens trip with joint opening of Beijing-funded New Gwadar International Airport ahead of two days of SCO meetings
https://www.scmp.com/news/china/diplomacy/article/3282458/chinas-li-qiang-vows-upgraded-pakistan-economic-corridor-first-visit-islamabad
Premier Li Qiang reiterated China’s pledge to upgrade a multibillion-dollar economic corridor with Pakistan and deepen joint counterterrorism efforts with its military as he arrived in Islamabad on Monday.
Li, who is on his first visit to the South Asian country as premier, will be attending a Shanghai Cooperation Organisation heads of government meeting in the Pakistani capital during his four-day trip.
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Li’s visit is the latest high-level exchange this year as China and Pakistan mark the 73rd anniversary of the establishment of diplomatic relations.
Sharif visited China in June for a five-day trip that included a meeting with President Xi Jinping. A joint statement following the meeting also pledged to build “an upgraded version” of the CPEC, with the new phase featuring the key themes of “growth, livelihood, innovation, green, and openness”.
Islamabad has implemented strict security measures for the 23rd Meeting of the SCO Council of Heads of Government starting on Tuesday.
SCO is a regional economic and security bloc largely driven by China and Russia that has seen its remit grow in the two decades or so since its formation.
All 10 SCO members, including China, Russia, India and Iran will be attending the two-day meeting under the chairmanship of Pakistan. The annual meeting focuses on the trade and economic agenda of the organisation.
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Textile exports increased by 18% YoY during Sep'24
Textile exports increased by 17.6% YoY (-2.4% MoM) to USD 1.6bn during Sep’24. During 3MFY25, exports increased by 9.3% YoY to USD 4.5bn.
https://x.com/ArifHabibLtd/status/1846967653568504037
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Trade balance detailed update
Trade deficit increased by 24% YoY to USD 1.8bn during Sep’24
During Sep’24, exports stood at USD 2.8bn (+15% YoY | +3% MoM). Imports during the month remained at USD 4.7bn (+18% YoY | +4% MoM). During 3MFY25, trade deficit also increased by 5% YoY to USD 5.5bn.
https://x.com/ArifHabibLtd/status/1846966925337022951
Pakistan Remittances ($8.79 b) and Trade Deficit ($5.5 billion) Q1 FY 2024-25
https://x.com/ArifHabibLtd/status/1846966925337022951
https://x.com/arifhabibltd/status/1843884748168478837?s=43&t=Uy6jyUH6DlEyIPi6Mq6AGQ
Chinese development association to invest $13 billion in Pakistan in five years — state media
https://www.arabnews.com/node/2575998/pakistan
Initial investment layout of $8-13 billion expected to surge to $30 billion, says state media
China is a major ally and investor in Pakistan that has pledged over $65 billion in various projects
ISLAMABAD: The China Asia Economic Development Association (CAEDA) will invest up to $13 billion in a free trade zone in Pakistan in the next five years, state broadcaster Radio Pakistan reported on Sunday.
As Pakistan reels from a prolonged economic crisis that has seen its foreign exchange reserves fall to critically low levels and its currency deteriorate significantly, Islamabad has sought to attract foreign investment from regional allies such as China and the Middle East to bolster its fragile economy.
The South Asian country set up the Special Investment Facilitation Council (SIFC) last year to attract foreign investment in economic sectors such as mining, agriculture, tourism and others. The SIFC is a hybrid civil-military body formed to fast-track investment-related decisions.
“China Asia Economic Development Association (CAEDA) will make an investment of 13 billion dollars in free trade zone of Pakistan in the next five years,” Radio Pakistan said.
“The initial layout of this investment is between 8 to 13 billion dollars while it is expected to reach 30 billion dollars,” it added.
The free trade zone is aimed at catering to Pakistan’s domestic needs and those of the global market, Radio Pakistan said. It added that a duty-free shopping mall is also part of the zone where international goods will be available for Pakistani citizens.
The state broadcaster said CAEDA has also sent 20 fishing boats to Pakistan with an investment of $500 million.
“Supported by Special Investment Facilitation Council, a delegation of the Association discussed agreements with Ministries of Energy and Health regarding refined petroleum products, solar power grid connection and investments in pharmaceuticals,” it said.
China is a major ally and investor in Pakistan that has pledged over $65 billion in investment in road, infrastructure and development projects under the China-Pakistan Economic Corridor (CPEC) project. CPEC is a part of the Belt and Road Initiative, a massive China-led infrastructure project that aims to stretch around the globe.
Chinese investment and financial support since 2013 have been key for Pakistan’s struggling economy, including the rolling over of loans so that Islamabad is able to meet external financing needs at a time its foreign reserves are low.
Though time-tested allies, recent security challenges have put a slight strain on Pakistan’s ties with China. Separatist and religiously motivated militants have attacked Chinese projects in Pakistan over recent years, killing Chinese personnel.
Earlier this month, a suicide blast claimed by the separatist Balochistan Liberation Army (BLA) killed three people in Pakistan’s southern port city of Karachi, including two Chinese nationals, who were targeted in the attack.
Five Chinese workers were killed in a suicide bombing in March, which was the third major attack on Chinese interests in Pakistan in a week.
China has called on Islamabad to ensure security for its citizens in Pakistan. The South Asian nation has in turn sought to ease Chinese fears, vowing to provide fool-proof security to its citizens living and working in the country.
Arif Habib Limited
@ArifHabibLtd
Country posted monthly Current Account surplus of USD 119mn in Sep’24 (Highest surplus after Apr'24)
The country posted a Current Account surplus of USD 119mn (surplus after 5 months) for the month of Sep’24 compared to a deficit of USD 218mn during Sep’23 and a surplus of USD 29mn during Aug'24.
During 1QFY25, the country’s deficit decreased by 92% YoY to USD 98mn compared with a deficit of USD 1,241mn during the same period last year.
https://x.com/ArifHabibLtd/status/1848325288666476750
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Arif Habib Limited
@ArifHabibLtd
Imports and Exports Breakup
https://x.com/ArifHabibLtd/status/1848392364211228988
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Pakistan Key Statistics Sep’24
https://x.com/ArifHabibLtd/status/1848357133193986350
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Arif Habib Limited
@ArifHabibLtd
Technology exports went up by 42% YoY during Sep’24 to USD 292mn
During Sep’24, technology exports went up 42% YoY | -2% MoM to USD 292mn contributing 44% to the overall services.
https://x.com/ArifHabibLtd/status/1848325449233166624
https://www.bloomberg.com/news/articles/2024-10-15/funds-tread-back-to-pakistan-local-bonds-as-economy-stabilizes
Pakistan's short-term local government bonds are set for their first annual inflow from foreign investors in five years, buoyed by high yields and a stable rupee in an improving macroeconomic environment.
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UED5VWKGU65RTR4H4XEKN2RP3M.jpg
Funds Return to Pakistan Local Bills as Economy Stabilizes
bnnbloomberg.ca
(Bloomberg) -- Pakistan’s short-term local government bonds are set for their first annual inflow from foreign investors in five years, buoyed by high yields and a stable rupee in an improving macroeconomic environment.Net overseas inflows into Treasury bills rose to $875 million in 2024, according to State Bank of Pakistan’s latest data from Monday. That’s a turnaround from four straight years of outflows totaling $1.4 billion.Pakistan’s success in stabilizing its cash-strapped economy is bearing fruit, with investors more confident on its ability to pay debt, thanks largely to the International Monetary Fund’s support. The nation’s treasury bills yield about 16% to 17%, among the highest in Asia.“Investors see a stable currency and high rates that is attracting them to Pakistan,” said Suleman Rafiq Maniya, an independent wealth manager in Karachi. In a sign of the nation’s growing appeal, JPMorgan Chase & Co. led a group of foreign investors in a visit to the country last month. Finance Minister Muhammad Aurangzeb discussed fixed-income investment opportunities with the group, assuring them of the government’s support in facilitating their investment.
The nation’s foreign reserves have increased to the highest in more than two years after an approval by the IMF for a new $7 billion loan package last month.Pakistan’s other assets have performed as well. The benchmark stock index has risen 73% in the past 12 months, making it the world’s best performer. Dollar bonds have delivered returns of nearly 40% this year, according to data compiled by Bloomberg.The treasury bills are still a decent investment option while the upside for government bonds is limited, Clifford Lau, portfolio manager at William Blair Investment Management wrote in a note last week after visiting Pakistan.
Arif Habib Limited
@ArifHabibLtd
KSE100 Index recorded it's highest - ever closing at 86,467
KSE-100 index went up by 409 points (+0.5%), closing at all time high level of 86,467.
https://x.com/ArifHabibLtd/status/1848686739965043044
Pakistan Finance Chief Sees ‘Encouraging’ China Debt Talks
https://www.bnnbloomberg.ca/business/international/2024/10/22/pakistan-says-debt-reprofile-talks-with-china-are-encouraging/
(Bloomberg) -- Pakistan is getting a promising response from China over its request to lengthen maturities for Belt and Road Initiative loans, according to its finance minister, signaling potentially more breathing room for the nation that has been squeezed by costly past borrowing.The South Asian nation is looking to increase the maturities for debt taken to build power plants and “create enough space” to lower electricity prices, Muhammad Aurangzeb said in an interview in Washington. Electricity prices have tripled for some people in Pakistan in the past few years and surpassed house rent for some.“We have just started that discussion and the response is encouraging,” Aurangzeb said Tuesday on the sidelines of the annual meetings of the International Monetary Fund and World Bank. “These are early days in terms of those negotiations. The former JPMorgan Chase & Co. banker discussed debt with Chinese officials during a visit to the country in July. Pakistan is seeing a period of stability after securing a new $7 billion loan program from the IMF. It has also seen partners including China roll over debt of $16 billion from a total of about $26 billion due in the current fiscal year that started in July. The government also plans to initiate discussions on obtaining additional financing from the IMF through its climate resiliency fund, he said.Having gone through 25 loan programs over half a century, the South Asian nation must institute durable reforms in the key areas of tax collection, energy sector and state-owned enterprises to end a cycle of indebtedness, the finance minister said separately at an IMF forum later in the day.
“We’ve had so many programs. We’ve had boom and bust cycles,” Aurangzeb said. “We do not have a choice but to ensure that we continue with the structural reforms.” He added that the government knows it has no business being in business and that it must provide an enabling environment to support the private sector. It also aims to shrink government costs by cutting the number of ministries and closing 150,000 federal positions.To boost tax revenue, Pakistan will target sectors including retail and agriculture that have opposed previous attempts at taxation. The nation’s provinces will move forward on legislation on the agriculture side by January and aim to start collection by July, the finance chief said in the interview with Bloomberg.The country has been a flagship destination for China’s Belt and Road Initiative of lending to developing countries that helped the nation end its decades-long electricity blackout issues. Now its seeking to extend the maturity of debt for nine power plants built by Chinese companies under the multibillion-dollar economic corridor. Pakistan’s period of stability has seen consumer price increases decelerate to the lowest in almost four years. Pakistan’s short-term local government bonds are set for their first annual inflow from foreign investors in five years, buoyed by high yields and a stable rupee. The benchmark stock index has risen 70% in the past 12 months, making it the world’s best performer.Pakistan’s central bank has cut its benchmark interest rate for three consecutive meetings by 450 basis points to 17.5% from a record 22%. The next meeting on Nov. 4 may see the central bank reduce the policy rate, said Aurangzeb.
Arif Habib Limited
@ArifHabibLtd
KSE-100 index hits record high, surpasses 88,000 Mark
oThe KSE-100 Index surged by 1,751 points (+2.01%) today, closing at a historic high of 88,946 points. This marks the fifth-largest one-day points gain in the index's history.
oThe remarkable performance brings the index's CY24TD gain to an impressive 42.4%, and MoM gain of 9.7%.
https://x.com/ArifHabibLtd/status/1849420372111687855
Arif Habib Limited
@ArifHabibLtd
As of Sep’24, Pakistan's Debt-to-GDP ratio has dropped to 65.7%, marking its lowest level since Jun’18. The Domestic Debt-to-GDP ratio is at 43.1%, while the External Debt-to-GDP ratio stands at 22.7%.
@GovtofPakistan
@StateBank_Pak
#SBP #Pakistan #Economy #AHL
https://x.com/ArifHabibLtd/status/1856013052644061281
Pakistan’s trade deficit contracts 31% YoY to $1.5bn in October 2024 - Pakistan - Business Recorder
https://www.brecorder.com/news/40330236
Pakistan’s trade deficit significantly decreased by 31% to $1.5 billion in October 2024 as compared to the same month of the previous year, data released by the Pakistan Bureau of Statistics (PBS) showed on Friday.
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Pakistan’s remittance inflow at $3.05bn in October 2024, up 24% year-on-year - Markets - Business Recorder
https://www.brecorder.com/news/40331410
On a month-on-month (MoM) basis, the inflow in October was 7% higher when compared to $2.86 billion in September 2024.
During 4MFY25, remittances went up by nearly 35% YoY to $11.8 billion as compared to $8.8 billion in 4MFY24.
Experts credit the increase in inflows to the stability of the exchange rate, a narrowing gap between open and inter-bank market rates, increase in digital payment channels and a rise in the number of workers relocating abroad, especially to GCC countries.
“These stronger inflows will help Pakistan maintain PKR stability and contain the current account deficit,” said Mohammed Sohail, CEO Topline Securities, in a note.
Home remittances play a significant role in supporting the country’s external account, stimulating Pakistan’s economic activity as well as supplementing the disposable incomes of remittance-dependent households.
Arif Habib Limited
@ArifHabibLtd
*Trade deficit decreased by 26% YoY to USD 1.6bn during Oct’24*
During Oct’24, exports stood at USD 3.0bn (+11% YoY | +5% MoM). Imports during the month remained at USD 4.6bn (-6% YoY | -1% MoM).
During 4MFY25, trade deficit also decreased by 4% YoY to USD 7.1bn.
https://x.com/ArifHabibLtd/status/1857441100337664363
Arif Habib Limited
@ArifHabibLtd
As of Sep’24, Pakistan's Debt-to-GDP ratio has dropped to 65.7%, marking its lowest level since Jun’18. The Domestic Debt-to-GDP ratio is at 43.1%, while the External Debt-to-GDP ratio stands at 22.7%.
https://x.com/ArifHabibLtd/status/1856013052644061281
Pakistan Stock Exchange surpasses 93,000 points, signalling economic optimism - Dailynewsegypt
https://www.dailynewsegypt.com/2024/11/14/pakistan-stock-exchange-surpasses-93000-points-signalling-economic-optimism/
The Pakistan Stock Exchange (PSX) 100 Index has crossed the 93,000-point mark, marking a new milestone for the country’s economic prospects. The surge in the index reflects growing investor confidence and a positive outlook for Pakistan’s economic future.
The PSX 100 Index crossing the 93,000-point mark represents a new chapter of economic optimism for Pakistan, reflecting investor confidence and resilience.
This historic milestone indicates that Pakistan is on an upward trajectory for economic stability and growth, inspiring trust among local and international investors.
“This historic milestone indicates that Pakistan is on an upward trajectory for economic stability and growth, inspiring trust among local and international investors,” said the Pakistan Stock Exchange in a statement, highlighting the significance of the milestone.
With the PSX reaching record highs, Pakistan is attracting foreign investment, strengthening its capital markets, and setting the stage for sustained economic growth.
The impressive rise in the PSX showcases Pakistan’s untapped economic potential, underscoring an era of modernization and innovation in key industries.
As Pakistan’s stock market booms, sectors such as technology, banking, and manufacturing are benefiting, creating opportunities and employment across the country.
The record-breaking performance of the Pakistan Stock Exchange aligns with the government’s economic reforms, affirming that structural improvements are fostering a stable, investor-friendly environment.
“The impressive rise in the PSX showcases Pakistan’s untapped economic potential, underscoring an era of modernization and innovation in key industries,” said the Pakistan Stock Exchange statement. “This reflects the government’s commitment to creating a favourable environment for business and investment.”
By reaching this historic peak, Pakistan is proving itself to be a promising frontier market, drawing interest from institutional investors worldwide.
The bullish PSX trend reflects growing investor confidence in Pakistan’s infrastructure, energy, and technology sectors, all of which are set to drive future economic expansion.
“By reaching this historic peak, Pakistan is proving itself as a promising frontier market, drawing interest from institutional investors worldwide,” said the Pakistan Stock Exchange.
The PSX’s performance highlights Pakistan’s transformation into a competitive and resilient economy ready to seize new opportunities on the global stage.
With the stock market on an upward trend, Pakistan is better positioned to finance mega-projects in infrastructure and energy, key drivers of sustainable economic growth.
The PSX symbolizes Pakistan’s commitment to reform, attracting investment, and laying the groundwork for a vibrant economic future.
“The PSX symbolizes Pakistan’s commitment to reform, attracting investment, and laying the groundwork for a vibrant economic future,” said the statement.
The continued strength of the Pakistan Stock Exchange is expected to encourage further investment and drive economic growth, demonstrating the country’s potential for a strong and prosperous future.
IT exports surge to $1.2bn in July-Oct - Business - DAWN.COM
https://www.dawn.com/news/1873376
KARACHI: Despite internet disruptions and firewall issues, Pakistan’s IT exports rose 35 per cent to $1.21bn during July-October 2024-25.
Nasheed Malik of Topline Securities said exports have risen due to IT export companies’ growing client base globally, especially in the Gulf Cooperation Council (GCC) region, relaxation in the permissible retention limit increasing it from 35pc to 50pc in the Exporters’ Specialised Foreign Currency Accounts, and exchange rate stability encouraged IT exporters to bring a higher portion of profits back to Pakistan.
IT exports surged 39pc year-on-year and 13pc month-on-month to $330m in October.
These monthly IT exports in October 2024 are higher than last 12-month average of $287mn. This is the 13th consecutive month of YoY IT export growth, starting from October 2023, he said.
He said the MoM increase in IT exports is due to a higher number of working days in October (23) compared to September (20). Export proceeds per day were recorded at $14.3mn for October 2024 versus $14.6mn in September 2024.
Pakistani IT companies are actively engaged with global clients. He added that leading IT companies recently attended Oslo Innovation Week 2024 and the Pak-US Tech Investment Conference.
According to a Pakistan Software Houses Association (P@SHA) survey, 62pc of IT companies maintain specialised foreign currency accounts.
Nasheed said a major development in FY25 was SBP adding a new category of Equity Investment Abroad (EIA), specifically for export-oriented IT companies. IT exporters can now acquire interest (shareholding) in entities abroad utilising up to 50pc proceeds from specialised foreign currency accounts.
Pakistan's textile exports climb 10% to $6.146 billion in first 4 months of FY24-25
https://arynews.tv/pakistans-textile-export-climbs-to-6-146-billion/
ISLAMABAD: Textile exports witnessed an increase of 10.44 percent during the first four months of the current financial year (2024-25) as compared to the corresponding period of last year, Pakistan Bureau of Statistics (PBS) reported.
The textile exports from the country were recorded at US $ 6,146.105 million during July-October (2024-25) against the exports of US $ 5,565.058 million during July-October (2023-24).
The textile commodities that contributed in trade growth included cotton cloth the export of which increased by 5.25 percent to $ 679.427 million from $ 645.535 million while the export of knitwear surged by 18.69 percent to $ 1,759.991 million from $ 1,482.862 million.
The other commodities that witnessed growth in trade included bed wear, the export of which rose by 13.17 percent to $ 1,069.690 million from $ 945.181 million, towels by 5.47 percent to $ 356.461 million from $ 337.987 million, tents, canvas, and tarpaulin up by 7.02 percent to $ 40.412 million this year compared to the exports of $ 37.763 million last year.
Similarly, the export of readymade garments grew by 25.40 percent to $ 1,358.890 million from $ 1,083.679 million, art, silk and synthetic textile rose by 12.26 percent to $ 131.614 million from $ 117,241 million, made up articles (excl. towels and bed wear) increased by 12.46 percent to $ 263.777 million from $ 234.555 million while the export of other textile materials surged by 7.48 percent to $ 252.630 million from $ 235.054 million.
The textile commodities that witnessed negative trade growth included cotton yarn, the exports of which declined by 45.49 percent, from $ 407.564 – million to $ 221.759 million whereas the export of raw cotton dipped by 100 percent from 23.346 million to zero export during the months under review.
Meanwhile, year-on-year basis, the textile exports witnessed an increase of 13.11 percent during October 2024 as compared to the same month of last year. The textile exports from the country during October 2024 were recorded at US $ 1,625.782 million against the exports of US $ 1,437.287 million in October 2023.
On a month-on-month basis, the textile exports from the country however witnessed a nominal decrease of 1.30 percent during October 2024 as compared to the exports of $ 1,604.856 million recorded in September 2024, according to the data.
Remittances to hit $35bn in FY25: Finance Minister
Aurangzeb says market forces are determining exchange rate
https://www.brecorder.com/news/40336408
KARACHI: Finance Minister Muhammad Aurangzeb on Saturday said the inflows of workers’ remittances are expected to hit an all-time high of $35 billion in the current fiscal year 2024-25, compared to $30.25 billion registered in FY24.
Talking to media persons at the Overseas Investors Chamber of Commerce and Industry (OICCI) in Karachi, the finance minister said state-owned entities (SOEs) are costing the national exchequer a loss of Rs2.2 billion per day.
“We have sustained losses to the tune of Rs6 trillion in the last 10 years, which comes to around 50% of the revenue collection target set at Rs12.9 trillion for FY25,” he said.
Investment, growth and credit safety: Aurangzeb pledges robust insolvency regime
Aurangzeb believed that the government sees controlling these losses through privatisation.
“Privatisation, liberalisation and deregulation are the way forward.”
The former banker shared that foreign companies operating in Pakistan have sent profit and dividends worth $2.2 billion in May-June 2024, clearing the entire backlog of the repatriation.
“Now there is no restriction on sending the repatriation from the Ministry of Finance and State Bank of Pakistan (SBP). This is now up to commercial banks to facilitate the foreign companies in continuing to send profit and dividends without any delay,” he maintained.
Pakistan moving on path of economic stability: Aurangzeb
Answering a query, Aurangzeb said the rupee-dollar parity depends on the demand and supply of the greenback in the market, while market forces are determining the exchange rate instead of the government.
Aurangzeb said the government has prioritized inviting Foreign Direct Investment (FDI) in export-led projects and increasing exports to achieve sustainable economic growth.
“Whenever our economy hit 4% growth rate, the issues of widening current account deficit (CAD) and balance of payment arise, as we are running an import-led economy,” he said.
The finance minister, however, did not respond to the question of when Pakistan would surpass the 4% growth rate.
Arif Habib Limited
@ArifHabibLtd
Remittances increased by 29% YoY to $ 2.9bn during Nov’24
Remittances by overseas Pakistani's increased by 29% YoY to USD 2.9bn during Nov'24 compared to USD 2.3bn during Nov’23. On MoM basis, remittances decreased by 5%.
In 5MFY25, remittances increased by 34%YoY to USD 14.8bn.
https://x.com/ArifHabibLtd/status/1866091692006244359
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Pakistan's remittances climb by 33.6% to $14.8 billion
https://arynews.tv/pakistans-remittances-climb-by-33-6-to-14-8-billion/
ISLAMABAD: The workers’ remittances increased by 33.6 percent during the first five months of the current fiscal year as compared to the corresponding period of last year, according to latest data of State Bank of Pakistan (SBP) released on Monday.
The remittances reached to US$ 14.8 billion during July-November 2024-25 as against the remittances of US$ 11.1 billion received during July-November 2023-24.
On year-on-year basis, workers’ remittances during November 2024 recorded an inflow of US$ 2.9 billion, posting an increase of 29.1 percent as compared to same month of last year.
Remittances inflows during November, 2024 were mainly sourced from Saudi Arabia ($729.2 million), United Arab Emirates ($619.4 million), United Kingdom ($409.9 million) and United States tof America ($288.2 million).
On December 6, he State Bank of Pakistan (SBP) witnessed a surge in the foreign exchange reserves with a reported increase of $620 million.
The State Bank of Pakistan in a statement said that “the total foreign reserves of Pakistan surged to US$16.62 billion supported by recent Asian Development Bank (ADB) loan transfer, while the SBP reserves crossed $12 billion as of November 29, 2024.”
According to the SBP, the total liquid foreign exchange reserves held by the central bank, increased by $620 million to $12,038.3 million after the official inflow of $500 million from ADB.
The SBP has received $500 million from Asian Development Bank (ADB) for the Climate Change and Disaster Resilience Enhancement Program (CDREP) as a policy-based loan to support disaster risk reduction and resilience in Pakistan
Pakistan stocks near 110,000-mark amid strong liquidity, interest rate cut hopes
https://www.arabnews.com/node/2582359/business-economy
Market closed at 916.43 points up, or 0.84%, to stand at 109,970.38 points from the previous close of 109,053.95
State Bank has slashed interest rates by 700 basis points in four consecutive meetings since June, bringing rate to 15%
ISLAMABAD: The Pakistan Stock Exchange (PSX) crossed 110,000 points during intraday trade on Monday to settle at 109,970.38 points at closing, amid strong liquidity available in the market and on the hopes of an interest rate cut next week, analysts said.
The benchmark KSE-100 index closed at 916.43 points up, or 0.84%, to stand at 109,970.38 points from the previous close of 109,053.95. The stock exchange had gained more than 1,000 points to reach 110,264 points at noon on Monday. This was the 9th consecutive session when shares at the market traded in green.
Analysts credit the rally to strong liquidity available with mutual funds as investors convert from fixed-income instruments to equities amid a reduction in interest rates.
“The longevity of the rally will likely depend on delivery of structural reforms such as efforts to broaden the tax net, energy reforms, state-owned enterprises,” Raza Jafri, chief executive officer of the Karachi-based EFG Hermes brokerage house, told Arab News.
“So far the government appears committed to delivering reforms which is positive, but eventually the talk will have to translate into action.”
Pakistan slashed interest rates by 250 basis points in November to help revive a sluggish economy, amid a major drop in the annual inflation rate. The State Bank has already slashed interest rates by 700 basis points (bps) in four consecutive meetings since June, bringing the rate to 15%.
According to a poll conducted by Topline Securities, 71% of participants expect the central bank will announce a minimum rate cut of 200bps at the upcoming Monetary Policy Committee meeting on Dec. 16.
Ahsan Mehanti, CEO of Arif Habib Corporation, attributed the bullish trend at the PSX to falling lending rates and speculation about another major policy rate cut by the central bank this week.
“Rupee’s stability on surging foreign exchange reserves and upbeat economic indicators played a catalyst role in the record surge at market,” he added.
Annual consumer inflation also slowed to 4.9% in Pakistan in November, lower than the government’s forecast, largely due to a high base a year earlier. It cooled from 7.2% in October, a sharp drop from a multi-decade high of nearly 40% in May 2023.
Pakistan’s textile exports surge 10% in 4MFY25 - Profit by Pakistan Today
https://profit.pakistantoday.com.pk/2024/11/15/pakistans-textile-exports-surge-10-in-4mfy25/
Overall, the country’s total exports for the 4MFY25 period amounted to $10.889 billion (provisional), marking a 13.55% rise from $9.590 billion in the corresponding months of the previous year. Exports in October 2024 reached $2.984 billion, reflecting a 5.22% increase from $2.836 billion in September 2024, and a 10.97% rise compared to $2.689 billion in October 2023.
The textile sector continued to lead the export growth, with textile group exports increasing by 13.11% in October 2024, totaling $1.625 billion compared to $1.437 billion in October 2023. On a month-on-month (MoM) basis, textile exports saw a slight 1.30% rise from $1.604 billion in September 2024.
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Pakistan records $349mn current account surplus in October 2024 - Markets - Business Recorder
https://www.brecorder.com/news/40333045
Overall, the figure takes Pakistan’s current account to a surplus of $218 million in the first four months of the current fiscal year (4MFY25), in contrast to a massive deficit of $1.528 billion in the same period of the previous fiscal year.
Breakdown
In October 2024, the country’s total export of goods and services amounted to $3.711 billion, up nearly 12% as compared to $3.327 billion in the same month of the previous year
Meanwhile, imports clocked in at $5.558 billion during October 2024, a jump of nearly 7% on a yearly basis, according to SBP data.
Worker remittances clocked in at $3.052 billion, an increase of 24% as compared to the previous year.
Low economic growth along with high inflation have helped curtail Pakistan’s current account deficit with an increase in exports also helping the cause. A high interest rate and some restrictions on imports have also aided the policymakers’ objective of a narrower current account deficit.
4MFY25
In 4MFY25, the country’s total export of goods and services amounted to $13.11 billion. Whereas, imports clocked in at $22.43 billion during the period, according to SBP data.
The country’s worker remittances clocked in at $11.85 billion, an increase of nearly 35% as compared to $8.79 billion in same period last year.
The current account is a key figure for cash-strapped Pakistan which relies heavily on imports to run its economy.
A widening deficit puts pressure on the exchange rate and drains official foreign exchange reserves, while the situation reverses vice versa.
In 2024, remittance flows to low- and middle-income countries are expected to reach $685 billion, larger than FDI and ODA combined
https://blogs.worldbank.org/en/peoplemove/in-2024--remittance-flows-to-low--and-middle-income-countries-ar
Officially recorded remittances to low- and middle-income countries (LMICs) are expected to reach $685 billion in 2024. The true size of remittances, including flows through informal channels, is also believed to be even larger. The growth rate of remittances in 2024 is estimated to be 5.8 percent, significantly higher than 1.2 percent registered in 2023
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The top five recipient countries for remittances in 2024 are India, with an estimated inflow of $129 billion, followed by Mexico ($68 billion), China ($48 billion), the Philippines ($40 billion), and Pakistan ($33 billion) (figure 1). In smaller economies, remittance inflows represent very large shares of gross domestic product (GDP), highlighting the importance of remittances for funding the current account and fiscal shortfalls. Topping the list is Tajikistan (45 percent of GDP), followed by Tonga (38 percent), Nicaragua (27 percent), Lebanon (27 percent), and Samoa (26 percent) (figure 2).
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The recovery of the job markets in the high-income countries of the Organization for Economic Co-operation and Development (OECD), following the onset of the COVID-19 pandemic, has been the key driver of remittances. This is especially true for the United States where the employment of foreign-born workers has recovered steadily and is 11 percent higher than the pre-pandemic level seen in February 2020 (see figure 3). By contrast, the employment level of native-born workers has recovered to the same level as before the pandemic. A similar pattern is seen in the case of Hispanic workers, which is a key factor for the strength of remittance flows to the Latin America and the Caribbean region.
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By region, remittance flows to South Asia is expected to register the highest increase in 2024, at 11.8 percent (figure 4), driven mainly by continued strong flows to India, Pakistan, and Bangladesh. Remittances to the Middle East and Africa is estimated to have increased 5.4 percent, primarily due to rebounded flows to Egypt, compared with a 14.6 percent decline in 2023.
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It is notable that remittances have continued to outpace other types of external financial flows to low- and middle-income countries. Remittances have even surpassed FDI significantly (figure 5). The gap between remittances and FDI is expected to widen further in 2024. During the past decade, remittances increased by 57 percent, while FDI declined by 41 percent. Remittances will likely continue to increase because of enormous migration pressures driven by demographic trends, income gaps, and climate change. Therefore, countries need to take note of the size and resilience of remittances and find ways to leverage these flows for poverty reduction, financing health and education, financial inclusion of households, and improving access to capital markets for state and nonstate enterprises.
Arif Habib Limited
@ArifHabibLtd
The KSE100 2025 forward PE ratio of 5.9x is still substantially below the 10-year average P/E of 8.2x.
This discount signals a sharp undervaluation of the index, suggesting that the market has 40% room for appreciation to 153k points when it aligns closer to historical valuation multiples.
https://x.com/ArifHabibLtd/status/1870368354730389748
Textile exports jump to $7.6bn - Business - DAWN.COM
https://www.dawn.com/news/1879463
ISLAMABAD: The textile and clothing exports increased 10.51 per cent in the first five months of the current fiscal year, Pakistan Bureau of Statistics data showed on Tuesday.
After contracting 3.09pc in the first month of 2024-25 in July, the textile exports maintained a bullish trend with robust growth of 13pc in August, 17.92pc in September, 13.11pc in October, and 10.81pc in November, respectively.
Many experts believe it would take a lot of struggle for the sector to compete with regional rivals due to the implementation of harsh taxation measures in the current fiscal year. However, the disruption in supply from Bangladesh has also boosted demand for Pakistani garments.
Textile and clothing exports have been static for the last two years despite having a $25 billion installed capacity due to structural issues, according to textile players.
Pakistan Notches Best Stock Rally Since 2002 on Growth Momentum
https://finance.yahoo.com/news/pakistan-notches-best-stock-rally-055344203.html
Pakistani stocks recorded their biggest annual gain in 22 years, outperforming nearly all markets worldwide as economic conditions improve and traders bet on more interest-rate cuts.
The South Asian nation’s benchmark KSE-100 Index rose about 84% this year. That makes the index the second-best performer in local currency terms among the more than 90 tracked globally by Bloomberg.
Country watchers expect the boom to continue next year, bolstered by likely more cuts in borrowing costs and easing inflation, while a loan program from the International Monetary Fund helps to stabilize the economy. Pakistan’s economy expanded more slowly than expected last quarter, but has broadly recovered from 2023 when it narrowly escaped a default.
“This year was all about the return of domestic mutual funds to the market following a much steeper cut in rates than expected,” said Bilal Khan, head of international equity sales at Arif Habib Ltd. “Next year, we will see notable inflows from foreigners as investors will not be able to ignore allocating to Pakistan given the performance.”
Pakistan central bank cuts key rate to 12% amid easing inflation | Reuters
https://www.reuters.com/markets/rates-bonds/pakistan-central-bank-cuts-key-rate-by-100-bps-2025-01-27/
Pakistan central bank cuts key rate by 100 bps to 12%
Inflation forecast to ease, core inflation stays high
Maintains full-year GDP growth forecast at 2.5%-3.5%
Outlook for current account balance has improved
IMF to conduct first review of $7 bln loan in March
KARACHI, Pakistan, Jan 27 (Reuters) - Pakistan's central bank cut its benchmark interest rate by 100 basis points to 12% on Monday, in line with expectations, as inflation eases and growth looks to set to pick up after 1,000 basis points of rate cuts over the last six months.
The State Bank of Pakistan has slashed rates from an all-time high of 22% last June, one of the most aggressive moves among central banks in emerging markets and exceeding its 625 bps of rate cuts in 2020 during the COVID-19 pandemic.
The bank's governor Jameel Ahmad said at a press conference that the inflation rate would ease further in January but noted core inflation remained elevated. He forecast full-year inflation in the year to June would average 5.5%-7.5%.
"Considering these developments and evolving risks, the Committee viewed that a cautious monetary policy stance is needed to ensure price stability," the bank's monetary policy committee said in a statement accompanying the decision.
"The real policy rate needs to remain adequately positive on a forward-looking basis to stabilize inflation in the target range of 5 – 7 percent," it added.
Fourteen of 15 analysts surveyed by Reuters expected the central bank to cut its key rate by at least 100 bps mainly due to weaker inflation.
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The bank maintained its forecast of full-year GDP growth at 2.5%-3.5% and predicted faster growth would help boost the country's previously struggling foreign exchange reserves.
"The improved current account outlook, along with the expected realization of planned financial inflows, is likely to increase the SBP's FX reserves beyond $13 billion by June 2025," the bank's statement said.
Pakistan posted a current account surplus of $0.6 billion in December, bringing the cumulative surplus to $1.2 billion for the first half of the current fiscal year, the bank said, adding the outlook for the current account balance had improved considerably.
China, Pakistan pledge to boost cooperation on infrastructure, mining projects | Reuters
https://www.reuters.com/world/asia-pacific/china-pakistan-pledge-boost-cooperation-infrastructure-mining-projects-2025-02-06/
HONG KONG, Feb 6 (Reuters) - China and Pakistan will upgrade and reconstruct Pakistan's railway network and further develop its Gwadar port, while Chinese companies can invest in the South Asian nation's offshore oil and gas developments, the official Xinhua news agency reported on Thursday.
The comments came as Pakistan's President Asif Ali Zardari visits China from February 4-8, where he will also attend the opening ceremony of the Asian Winter Games.
Chinese investment and financial support for Pakistan since 2013 have been a boon for the South Asian nation's struggling economy.
Pakistan and China recognised the importance of Pakistan's "Gwadar Port and agreed to fully unleash its potential as a key node for connectivity and trade," Xinhua said quoting a joint statement from the two countries.
Chinese-funded enterprises would be encouraged to "carry out mining investment cooperation in Pakistan" and cooperate in terrestrial and marine geological resources.
"Pakistan welcomes Chinese companies to participate in the development of offshore oil and gas resources in Pakistan."
Longtime Pakistan ally China has thousands of nationals working on projects grouped under the China-Pakistan Economic Corridor (CPEC).
The $65-billion investment is part of President Xi Jinping's Belt and Road Initiative, designed to Beijing's global reach by road, rail and sea.
Is Imran Khan losing momentum?
https://www.dw.com/en/taking-stock-of-pakistans-government-a-year-after-elections/a-71541070
Economic indicators improving
For years, Pakistan has been dealing with an economic crisis marked by high inflation, a depreciating currency and International Monetary Fund (IMF) bailouts.
However, there is some room for optimism this week after the Pakistan Bureau of Statistics reported year-on-year inflation came in at 2.4% — the lowest in nine years. This marks a significant decline from the 28.3% recorded in January 2024.
"One year after the February 2024 election, Pakistan's economy seems to have stabilized and this has certainly boosted the confidence of the current 'hybrid regime,'" said Rumi.
"Politicians in power have made arrangements to continue the current regime and have removed all the threats, in particular, the independent judges who may have questioned the act of the current hybrid order," he added.
Currently, Pakistan is benefiting from a $7-billion (€6.7-billion) support package from the IMF, which was granted in September, as it works toward economic recovery.
In January, Pakistan agreed to an unprecedented 10-year plan with the World Bank which will see $20 billion (€19.4 billion) worth of loans for the country's cash-strapped economy.
Last week, Pakistan's central bank reduced its benchmark interest rate by 100 basis points to 12%, reflecting the easing of inflation and the anticipated growth following a total of 1,000 basis points in rate cuts over the past six months.
The State Bank of Pakistan has significantly lowered rates from a peak of 22% in June, marking one of the most aggressive actions among central banks in emerging markets, surpassing the 625 basis points cut implemented in 2020 during the COVID-19 pandemic.
In December, Pakistan's consumer inflation rate was recorded at 4.1%, the lowest in over six years, aided by favorable base effects. This figure was below the government's expectations and a notable decrease from the multi-decade high of approximately 40% observed in May 2023.
'Path toward will not be easy'
Analyst Rumi said a stable path forward for Pakistan's democracy would require a "broad base consensus on the next election and how it should be held under a neutral election commission."
"Perhaps this quagmire can best be addressed through an early election, and history tells us that handling the current level of political instability would require an understanding of a free and fair election within the next two years," he said.
On healing political wounds, Kugelman said the "only way forward is dialogue."
"Talks [between government officials and Khan's aides] collapsed in recent days, but at least there was an effort to sit together. This offers something to build on for the future. Even with all the anger and ill will, the two sides have been willing to engage," he added.
Afzal agrees that Pakistan's opposing political parties need to bury the hatchet.
"The current level of political fighting will continue until there is some sort of reconciliation and political space allowed to the opposition — and that would be the right path forward for Pakistan and for its democracy — but the path toward will not be easy."
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Despite continued political protests carried out by PTI supporters, analysts contend that this has not been enough to move the needle, as the PML-N enjoys significant support from Pakistan's powerful military.
"A year after a marred election, the civilian coalition government, in partnership with the military, has consolidated control over the country," Madiha Afzal, a fellow at the Brookings Institution, told DW.
"Of course, it has come at quite a bit of cost — to the country's democracy, to the judiciary's independence, to people's freedom of speech and right to information — and its benefits are in question," she added.
Khan was removed from premiership in 2022 through a no-confidence vote in Pakistan's parliament.
Pakistan Reforms Report 2025 Launched
https://www.kron4.com/business/press-releases/ein-presswire/784314115/pakistan-reforms-report-2025-launched/
Governance & Public Sector Reforms
- 150,000 federal workforce positions eliminated to reduce expenditures.
- 33% female representation mandated on government boards.
Economic & Financial Reforms
- Inflation reduced from 38% in May 2023 to 4.1% by December 2024.
- Foreign exchange reserves increased from $4.4 billion to $11.73 billion by the end of 2024.
- Helped maintain currency stability and prevent extreme fluctuations.
- GDP growth improved from 0.29% to 2.38% in the past year, projected to reach 3.5% in FY25.
- Trade deficit reduced from $27.47 billion to $17.54 billion in 12 months.
- Defined contribution pension reform expected to save Rs. 1.7 trillion over 10 years.
- Rs. 83 billion expected reduction in pension allocations for FY 2025–2026.
- Restored investor confidence; encouraging local and foreign investment.
- Averted a severe economic crisis through strategic intervention, through SIFC.
- Expanded crackdown on illicit trade through targeted illegal activities under the Afghanistan Transit Trade Agreement (ATTA).
- Addressed the influx of untaxed, smuggled goods into Pakistan.
Investment & Industrial Reforms
- 34 Memorandums of Understanding (MoUs) signed with Saudi Arabia, worth $2.8 billion.
- SEZ expansion and industrial policy reforms expected to boost exports and attract FDI.
- Business Facilitation Centers (BFCs) to ease regulatory burdens.
Security & Immigration Reforms
- Visa Prior to Arrival (VPA) facility granted to 120 countries; over 120,000 visas approved in 6 months.
- All madrassas must register within six months (new ones within a year).
- Madrassas are required to submit financial audits annually to ensure transparency.
- Encourages the inclusion of modern education subjects alongside religious studies in madrassas.
- Madrassas can register under either the Societies Act or the Ministry of Education.
- Creation of the National Forensics and Cybercrime Agency (NFCA) to tackle cyber threats.
- 1,600 Special Protection Unit (SPU) personnel deployed to safeguard non-CPEC projects.
- 100 surveillance cameras installed under the Islamabad Safe City Project.
- 973 officers recruited for the new Anti-Riot Force.
Digital Transformation & Cybersecurity
- National Forensics and Cybercrime Agency (NFCA) established.
- The Digital Case Flow Management System implemented in 178 federal courts, tracking 130,000 cases via SMS.
- AI-driven National Registration & Biometric Policy Framework launched.
- Introduced new policies to protect users from data breaches and cyber threats.
- Updates outdated cyber laws to align with global best practices.
- Strengthens laws against false, misleading, and harmful digital content.
- Establishment of Social Media Protection and Regulatory Authority for digital oversight.
- Adjustments made to penalties for fake news while
Pakistan, China sign $300mn MoUs in energy, coal, and cement sectors
Agreements include renewable energy projects, cement production, and coal gasification
https://profit.pakistantoday.com.pk/2025/02/06/president-zardari-witnesses-300-million-deals-in-energy-coal-and-cement/
The agreements, signed between Pakistani stakeholders and Chinese investors, aim to enhance the country’s industrial growth and energy sustainability.
The Energy Department of the Government of Sindh and Ming Yang Renewable Energy (International) Company Ltd. signed an MoU to advance renewable energy projects in the province.
Pakistan’s Ambassador to China, Khalil Hashmi, signed on behalf of the Ministry of Energy, while Ming Yang Renewable Energy Chairman Li Jianzhang represented the Chinese side.
The partnership will focus on wind and solar hybrid power generation projects, including a 75 MW facility in the Kotri/Nooriabad Industrial Area and a 350 MW plant in Jhimpir, Thatta.
In the cement sector, Thatta Cement Company Limited and Zhonggang Construction Group signed an MoU outlining plans for a new 5,000 t/d cement production line.
Additionally, the Sindh Government reached an agreement with MESKAY FEMTEE CG&M Pvt. Ltd. for a coal gasification and urea production plant in Pakistan, Gwadar Pro reported on Thursday.
The signing ceremony was attended by key officials, including Sindh Chief Minister Syed Murad Ali Shah, Senator Saleem Mandviwalla, Chief Whip of the Senate, Senior Minister of Sindh Sharjeel Inam Memon, Minister for Energy and Planning Syed Nasir Hussain Shah, Pakistan’s Ambassador to China Khalil Hashmi, along with senior government representatives, business leaders, and industry stakeholders.
Arif Habib Limited
@ArifHabibLtd
The auto sales numbers increased to 17K units, up by 65% MoM
Auto sales (Cars, LCVs, Vans, Jeeps & EVs) increased by 65% MoM to 17K units (+61% YoY) during Jan’25 (assuming SAZEW sold 500 units in Dec’24).
During 7MFY25, auto sales clocked in at 78.2K units up by 56% YoY.
https://x.com/ArifHabibLtd/status/1889280038668816746
Global funds turn to Pakistan as 84% stock rally set to extend
https://www.thenews.com.pk/print/1282136-global-funds-turn-to-pakistan-as-84pc-stock-rally-set-to-extend
Some of the world’s top money managers are once again favoring Pakistan’s stocks after the market returns last year were among the best globally, reports Bloomberg.
From BlackRock Inc to Eaton Vance Corp, asset managers are warming up to the South Asian nation’s $50 billion market that handed investors 84 per cent returns in 2024. Attractive valuations and a stabilising economy have improved the outlook for local shares, with Intermarket Securities Ltd. predicting a gain of about 40 per cent for the main KSE-100 index this year.
“You don’t have to stretch your imagination to make an investment case for Pakistan,” said Steven Quattry, New York-based portfolio manager at Morgan Stanley Investment Management Inc. The rally has been supported by strong earnings growth, he said.
Pakistan’s stocks surged last year, helped by improving economic outlook and crucial loan deals with the International Monetary Fund. More recently, the nation’s current account balance has improved, and easing inflation spurred the central bank to cut rates.
The optimism is reflected in foreign fund allocations. The nation’s stocks had a 5.0 per cent weight in BlackRock Frontiers Investment Trust as of December, marking a return for the money manager for the first time since March 2022. Eaton Vance also reentered the market in the June quarter following a brief exit.
Legal & General Investment Management Ltd and Evli Fund Management Co have also raised holdings, according to data compiled by Bloomberg. The level of foreign investor interest at present is comparable to the peak years of 2014-2018, according to Mohammed Sohail, chief executive officer of Topline Securities Ltd.
Political Instability
Still, risks remain. The political environment is fragile, with former Prime Minister Imran Khan wielding power to mobilise nationwide protests from behind bars -- unrest that threatens to derail economic activity.
Economic challenges also persist. The nation fell 6.0 per cent short of its six-month tax collection target -- a key condition for its $7 billion IMF loan -- raising concerns about its ability to win the next tranche of the funding.
A downgrade in the nation’s status to frontier market status by FTSE Russell that took effect in September hurt sentiment, prompting foreigners to turn net sellers in the last three months of 2024.
Despite these headwinds, investors are bullish given the improving external finances. Foreign exchange reserves now cover more than two months of imports, inching closer to the IMF-prescribed levels. That’s an improvement from less than a month’s coverage before the IMF bailout in 2023.
“If Pakistan can manage its current account deficit, which they should be able to, we can see a multi-year rally in the market,” said Ruchir Desai, a fund manager at Asia Frontier Capital Ltd in Hong Kong.
Pakistan’s economy is back. But so is terrorism.
by Mihir Sharma
https://www.japantimes.co.jp/commentary/2025/03/19/world/pakistans-economy-and-terrorism-are-back/
Its nascent revival may be short-lived if insecurity in the borderlands comes to urban centers
The Pakistani state’s control over its western borderland has never been absolute.
Last week, the horrific hijacking of a train by Baloch separatists showed that what little authority it had is fraying. Four soldiers died retaking the Jaffar Express; 21 of the hundreds of hostages had already been killed by the militants, some of whom may have been in the military as well.
Sparsely populated Balochistan has long resented Islamabad’s rule. But separatist activity has intensified in recent years, particularly after Pakistan invited Chinese companies to develop Gwadar port and exploit local minerals. One such organization, the Baloch Liberation Army, claimed this attack.
Pakistan’s military — which, rather than the civilian government of Prime Minister Shehbaz Sharif, retains control over national security — was quick to blame the Afghan Taliban government in Kabul for allowing the BLA to operate from its soil. Relations between the two countries are at a familiar low.
Certainly, the establishment is no longer gloating that the extremists it supported managed to outlast the U.S. military. The Afghan Taliban’s takeover of Kabul has emboldened its fellow travelers. The Pakistani Taliban killed 558 people in 2024, almost twice as many as in the previous year. Baloch separatists murdered more than 500, up from 116 in 2023.
The resurgence of terrorism in Pakistan’s wild west has complicated Sharif’s already difficult job. He wants to focus on steering the country away from economic crisis, but issues from Afghan relations to Baloch discontent demand his government’s attention. These are problems that need political solutions.
The disconnect between the grim drumbeat of terror attacks on the country’s margins and the positive economic news from its heartland is startling.
Inflation is running at 1.5%, down from almost 40% in just two years. Investors in the Karachi stock market were given a world-beating 84% return last year and expect about 40% this year. The government looks stable enough now that foreign investors have returned to buying its short-term debt. As the soldiers finished their grim task in Balochistan last week, Moody’s was announcing that it had changed its outlook on the banking system from stable to positive.
Much of this is thanks to the civilian government’s work raising revenue and managing public debt. Privatization efforts and new taxes mean that revenue may increase enough for the International Monetary Fund to keep running its $7 billion loan program. And China has promised to roll over its $2 billion loan book as well.
New success stories are emerging out of the country, as well. It’s now one of the largest markets for solar panels in the world; just the amount it bought in 2024 would be enough to raise installed electricity capacity in the country by a third.
But Sharif’s work at staving off crisis, particularly by stabilizing the current account deficit, clearly hasn’t pleased everyone. Economic gains are always at risk if you don’t come to some accommodation with your rivals, political or geopolitical.
Jailed opposition leader Imran Khan, for example, directly targeted the economy when he asked his supporters abroad to stop sending money home. Without workers’ remittances, Pakistan wouldn’t have the foreign exchange it needs for imports, particularly of energy. Fortunately, Khan’s irresponsible gambit failed, with remittances growing 29.3% in 2024. But he has more than enough supporters to paralyze the nation’s streets whenever he gives the order.
The Pakistani Taliban feels similarly to Khan about the return of economic stability and has turned to threatening firms linked to the military. Given the military’s presence in business, you could read that as a threat against the country's entire economic infrastructure.
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