PSX surges amid signs of economic recovery in Pakistan
Nukta Founder and CEO Kamran Khan says the economy began to stabilize under the caretaker government, aided by SIFC
The current political and economic landscape in Pakistan is showing promising signs of stability and consolidation, reflecting a positive shift in governance, judiciary, and business environments.
Recent events surrounding the 26th Constitutional Amendment have seemingly put an end to a prolonged political tug-of-war, dispelling fears of a constitutional crisis.
This newfound political stability has fostered economic recovery, as evidenced by an impressive surge in the stock market, which recently crossed the 91,000-point mark—up from 41,000 points just two years ago.
The economy began to stabilize under the caretaker government, aided by the Special Investment Facilitation Council (SIFC), which enforced economic discipline and curtailed smuggling through better control of Afghan transit trade.
Despite challenges, Finance Minister Muhammad Aurangzeb successfully negotiated a $7 billion bailout with the IMF in the first quarter of this fiscal year, with significant rollover agreements from Saudi Arabia, the UAE, and China.
Key economic indicators are showing positive growth, with exports, remittances, and foreign direct investment (FDI) all experiencing substantial increases. Inflation, which had reached alarming heights of 38% last year, has dramatically fallen to 6.9%, the lowest in over three years.
Interest rates have also decreased significantly, from 22% to 17.5%, with further cuts anticipated. Additionally, foreign exchange reserves have surged to their highest level in three years, reaching over $11 billion, a marked improvement from just $2.9 billion last year.
If this political stability persists, it could be a game changer for Pakistan's economic recovery, satisfying the demands of international stakeholders for a more stable governance framework.
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