Karachi, February 27, 2025 – The Pakistan Stock Exchange (PSX) has expressed optimism that Pakistan’s economic growth is likely to persist in the coming months, driven by macroeconomic stabilization measures and strategic policy shifts.
In its financial report released on Thursday, PSX highlighted that Pakistan has made notable progress toward economic stabilization. At the beginning of FY24, the country faced economic challenges, including political uncertainty, global monetary policy tightening, and external imbalances. These factors put pressure on domestic prices and foreign reserves. In response, the government restored exchange rate flexibility, relaxed import controls, and implemented measures to contain the fiscal deficit. As a result, economic indicators showed improvement during the first half of FY25, reinforcing confidence in Pakistan’s macroeconomic trajectory.
PSX noted that Pakistan remains on a stable path toward sustainable and inclusive growth. The government has renewed its focus on high-potential sectors such as IT, SMEs, mining, tourism, exports, and agriculture. These sectors are expected to contribute significantly to the country’s balance of payments. Additionally, foreign investments are being reinvigorated, and efforts are underway to facilitate overseas Pakistanis in boosting home remittances, which reached $17.8 billion for the first half of FY25, compared to $13.4 billion in the same period last year.
The successful completion of the Stand-by Arrangement with the IMF in FY24 paved the way for an Extended Fund Facility (EFF) worth $7 billion over 37 months. This agreement, approved by the IMF Executive Board, resulted in an immediate disbursement of $1 billion.
PSX reported that the State Bank of Pakistan’s tight monetary policy has successfully curbed inflation to single digits. Industrial output has risen, large export-oriented sectors have expanded, and the current account recorded a surplus of $0.944 billion during the first five months of FY25. Foreign exchange reserves stand at approximately $11.7 billion as of January, bolstered by improved exports and remittances.
Market confidence remains strong as the PSX continues its upward trajectory. Amid easing inflationary pressures, the Monetary Policy Committee (MPC) reduced the policy rate to 12 percent. Mutual funds have emerged as net buyers, injecting $186.8 million into PSX in CY24, a stark contrast to net selling of $132 million last year. Consequently, PSX has been recognized as one of the world’s second-best performing markets, delivering an impressive USD return of over 86.2% in CY24.
The government remains committed to fostering robust and sustainable economic growth. Its strategy includes enhancing public finances through fair taxation, increasing investments in education, healthcare, and social safety nets, and implementing energy sector reforms to reduce costs. Additionally, restructuring and potential privatization of state-owned enterprises are expected to improve public service delivery. PSX emphasized that these comprehensive reforms will strengthen Pakistan’s economic resilience and attract long-term private sector investments.
With a favorable market outlook and continued policy support, PSX expects economic momentum to remain positive, reinforcing investor confidence and driving Pakistan toward sustained growth.