In the second trading session of the new year, the capital market continued its bullish momentum and crossed 118,000 points for the first time in history.
The rally was based on renewed optimism about reducing inflation, strengthening macroeconomic fundamentals and the government’s ambitious reform agenda.
The encouraging momentum was further supported by the government’s revenue recovery efforts and the unveiling of a transformative economic growth plan focused on boosting investment and driving export-led growth.
The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) rose 1,359.73 points or 1.16% to touch an intraday high of 118,169.81 in early trade on Thursday.
In the federal cabinet meeting on Wednesday, Prime Minister Shehbaz Sharif expressed satisfaction over the macroeconomic stability achieved so far, but stressed the need to shift focus to development. He said that now we have to step into the export sector because there is no other option for economic development.
Emphasizing the importance of export-led growth, Shahbaz said that the Federal Board of Revenue (FBR) needs strong enforcement to meet the revenue targets set by the International Monetary Fund (IMF). Actions should be taken.
The Prime Minister also highlighted the recent increase in revenue collections, which reached a 25-year high. However, they recognized a significant gap between collected revenues and the ambitious targets set by the IMF.
Inflation data has also boosted investor sentiment. The Consumer Price Index (CPI) fell to 4.1 percent year-on-year in December 2024, from 4.9 percent in November and a staggering 29.7 percent in December 2023.
While the year-on-year decline signals economic stability, month-on-month inflation edged up a modest 0.1 percent, pointing to underlying cost pressures.
Prime Minister Shehbaz on Tuesday unveiled the five-year national economic transformation plan of “Iran Pakistan”. The initiative aims to attract foreign investment of $10 billion annually and encourage local investment through sustainable export development.
Anchored on the “5Es”—exports, e-Pakistan, environment, energy, equity, and empowerment—the plan targets six percent GDP growth by 2028, creation of 1 million jobs annually, and strong private sector participation. keeps
On the trade front, Pakistan’s trade deficit widened 35 percent year-on-year to $2.44 billion in December, the highest since April 2024. -year growth, standing at $2.84 billion.
Month-on-month, the trade deficit widened by 47 percent, reflecting a sharp increase in import activity.
The FBR reported collections of Rs 5,623 billion in the first half of FY 2024-25, though this fell short of the IMF’s target of Rs 6,009 billion. Measures such as a 44 per cent fixed tax on banking sector profits generated revenue of Rs 72 billion, providing a partial cushion against the deficit.
On Wednesday, the PSX posted a strong gain, with the KSE-100 index up 1,881.18 points or 1.63% to close at 117,008.08. Analysts cited fresh appropriations and better-than-expected tax collection numbers, signaling that additional tax measures may not be needed.
A combination of a well-defined economic strategy, declining inflation, and improving investor confidence positions the PSX for sustained positive momentum.