The capital market opened on a cautious note on Friday, as investors balanced optimism over easing inflation and improving macroeconomic indicators with concerns over rising trade and debt deficits. tax collection.
The market showed a mixed trend, reflecting fluctuating investor sentiment at the start of the session.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index climbed 703.94 points, or 0.6 percent, to an intraday high of 117,823.59. However, it fell to an intraday low of 115,580.01, down 1,539.64 points or -1.31%, from the previous close of 117,119.65.
Prime Minister Shehbaz Sharif, chairing the 11th meeting of the Supreme Committee of the Special Investment Facilitation Council (SIFC) on Thursday, highlighted the improvement in Pakistan’s macroeconomic indicators. He attributed this progress to the government’s constant efforts and stressed that economic stability is deeply linked to political stability.
“For the first time since 2018, the inflation rate fell to 4.1%, foreign remittances increased by 34%, exports increased and foreign exchange reserves fell from $4 billion to $12 billion. .5 billion dollars,” he said. The Prime Minister also noted that the policy rate of 13% provides room for further reduction, given the downward trend in inflation.
Prime Minister Shehbaz further highlighted the importance of export-led growth and highlighted that MoUs worth billions of dollars had been signed with Saudi Arabia, Qatar and the United Arab Emirates (UAE) to attract foreign investment. He reiterated the need for national unity to ensure sustainable economic growth and stability.
However, economic challenges persist. The Federal Board of Revenue (FBR) reported a large tax deficit of Rs 386 billion in the first half of the financial year 2024-25.
The total revenue collection stood at Rs5.623 billion, below the International Monetary Fund’s (IMF) indicative target of Rs6.009 billion.
Adding to the challenges, Pakistan’s trade deficit soared to $2.44 billion in December 2024, an increase of 35% year-on-year and the highest level since April.
Exports edged up 0.67% year-on-year to $2.84 billion, while imports jumped 14% to $5.285 billion, marking a 47% monthly rise in the trade deficit from november.
Despite these concerns, inflation trends have provided some relief. Consumer price index (CPI) inflation for December fell to 4.1% year-on-year, the lowest in six and a half years, compared to 4.9% in November and 29.7% in December 2023. This gives hope for further monetary easing in the short term.
On Thursday, January 2, 2025, the KSE-100 Index closed at 117,119.65, registering a modest gain of 111.57 points or 0.1% from the previous session.