KARACHI – The Pakistan Stock Exchange (PSX) registered upward trend in opening trading session on Thursday after the International Monetary Fund approved $7 billion under the Extended Fund Facility program for Pakistan.

Till 10:50 am, the KSE-100 index gained 360.11 points to reach 82,608,02 points with analysts anticipating further gains by the end of the closing time.

A day earlier, the 100-index benchmark closed at 82,247.91 points.

A day earlier, IMF approved much-needed $7 billion bailout package for Pakistan, with first tranche of the funds slated to be released on September 30.

The Asian nation secured 37-month loan agreement with the IMF, following confirmation of $12 billion in bilateral loans from Saudi Arabia, China, and the UAE. Pakistan owes $5 billion to Saudi Arabia, $4 billion to China, and $3 billion to the UAE.

Pakistan got $2 billion in external financing through Saudi oil facilities, a $400 million ITFC facility from the IsDB, and support from Standard Chartered Bank and other Middle Eastern banks for the IMF funding.

The country of over 242 million has long depended on IMF programs, often facing sovereign default and seeking assistance from the UAE and Saudi Arabia to meet financial targets.

The exact terms of bailout package will be revealed soon, with experts linking the development with more positive outcomes at economic level. Islamabad struggled to negotiate such favorable terms and expressed hope that this program could mark Pakistan’s last engagement with the IMF, contingent upon the implementation of crucial structural reforms.

The bailout follows staff-level agreement reached in July for an extended fund facility (EFF) of approximately $7 billion. The economy of fifth most populated country is currently grappling with several issues including inflation and 2022 flooding. Facing dwindling foreign currency reserves, the country found itself in a debt crisis and sought assistance from the IMF, securing its first emergency loan in the summer last year.

Pakistan’s headline inflation is likely to lose more steam over the next two months, coming down to around 8-9%, the Finance Division said on Friday, expressing optimism about economic stability.

In its ‘Monthly Economic Update and Outlook’, the ministry reported that the Consumer Price Index (CPI) fell to single digits in August 2024, marking a 34-month low, and is projected to decline further in the short term.

Inflation for August stood at 9.6% on a year-on-year basis, compared with 27.4% in the same month a year earlier, the report showed.

The ministry also noted that Pakistan’s economy had shown signs of recovery in the first two months of fiscal year 2025.

“Inflation has dropped to single digits, industrial output has strengthened, and major export sectors have experienced growth, suggesting an optimistic export outlook,” the report added.

According to the report, the current account deficit (CAD) contracted, while the fiscal sector remained resilient, mainly attributed to prudent measures. “This trajectory is expected to continue in the coming months.”

Finance Minister Aurangzeb urges private players to play role in CPEC and national economy

Fida Hussnain
Lahore

China Ambassador to Pakistan Mr. Jiang Zaidong said that they conducted a survey according to which 48 per cent of Chinese companies want to maintain and expand their businesses in Pakistan.

“We need to expand and consolidate our cooperation. We need to increase cooperation in different sectors including mining and agriculture,” said the Chinese envoy.

He expressed these words during a “High Level Private Leaders Dialogue” held under the aegis of newly established Pakistan Regional Economic Forum (PREF) to discuss the potential joint venture opportunities in the region at a local hotel on Wednesday.

Chinese Consul General in Lahore Mr. Zhao Shireen and other Chinese officials also graced the occasion. Chairman and Editor-in-Chief of Pakistan Observer Faisal Zahid Malik also took part in the dialogue discussion.

Pakistan former Ambassador to China Naghmana Hashmi and Vice-Admiral (R) Khan Hasham bin Siddique were also present there.

The event was co-chaired by the Chinese Ambassador Mr. Jiang Zaidong and was attended by business leaders of Pakistan. The Minister for Finance Mr. Muhammad Aurangzeb, addressed the audience via zoom link from New York.

Addressing the forum, the Chinese Ambassador emphasized the need to strengthen confidence in the development prospects of Pakistan confidence in China-Pakistan relations and in the bright future of mankind.

“First, we need to strengthen confidence and work hard. Confidence in the development prospects of Pakistan, confidence in China-Pakistan relations and confidence in the bright future of the mankind,” said the Chinese ambassador.

He emphasized that they must keep the development of the country and the destiny of national development in their own hands. He further stated that in order to strive for practical results, they must consolidate, deepen and expand China-Pakistan cooperation.

Moreover, they need to take the agricultural advantages of neighboring provinces as an example to discuss the agricultural cooperation between China and Pakistan. Also, Pakistan should offer enhanced mutually beneficial preferential policies for Chinese and regional entrepreneurs.

The Chinese Ambassador stated that current problems in Pakistan’s energy sector was not due to Chinese enterprises or the concept of CPEC but due to Pakistan’s perennial issues in the sector. He pointed out that Pakistan’s energy sector had entered an adjustment phase, while power generation capacity had been enhanced, Pakistan’s energy sector is going through a systemic transition towards gaining more efficiency and price stability.

Mr. Jiang Zaidong said that “Our friends have mentioned many advantages and I am agree with them,”.

“Of course, Pakistan geographical location is significant, and therefore we believe that it is window of Asia,” said the Chinese Ambassador.

He also mentioned the great potential of Pakistan by saying that its 60 per cent of population is under 30. He also acknowledged that there are many natural resources in Pakistan. Pakistan, he said, is a major producer of cotton and wheat and other agricultural products in the world.

The ambassador also lauded the incumbent government under Prime Minister Shehbaz Sharif by saying that Pakistan’s GDP growth is now on the positive trajectory. Inflation, he said, also got reduced while the foreign reserves also improved now.

KARACHI – Pakistan Power Reforms Project was officially launched at an event co-hosted by the School of Business Studies at the Institute of Business Administration (IBA) and the Ministry of Energy (Power Division).

In a keynote address, the Federal Minister of Power Sardar Awais Laghari outlined a comprehensive roadmap aimed at transforming the country’s energy sector to enhance efficiency and stimulate industrial and economic growth.

Minister emphasized that structural reforms will be multifaceted, with tangible results expected in the coming months. Key initiatives include improving governance standards for distribution companies and radically transforming the transmission infrastructure to reduce losses and enhance operational efficiency.

Addressing the issue of surplus generation capacity, the Minister highlighted plans to stimulate industrial demand through various interventions, which are expected to accelerate growth in the industrial sector.

A significant focus was placed on tariff structures, with the Minister noting that front-loaded debt repayments have significantly contributed to capacity charges. By utilizing various policy levers, the government aims to rationalize prices and transition towards a competitive market regime that rewards efficiency, moving away from the existing cost-plus model.

The upcoming policy encouraging the adoption of Electric Vehicles (EVs), particularly two- and three-wheelers, was also a highlight of the discussion. This initiative is expected to increase electricity demand while reducing household transportation costs and cutting down the import bill associated with fuel.

Laghari pointed out that Pakistan boasts one of the cleaner energy mixes globally, with over 55% of electricity generated from renewable sources, including hydel and nuclear. This figure is projected to exceed 70% in the coming years, with nearly 75% of electricity generated from indigenous sources, anticipated to rise above 90%.

The event concluded on a positive note, underscoring a commitment to a reform agenda that aims to improve governance standards and efficiency in electricity generation, transmission, and distribution. These reforms are expected to lower electricity prices, ultimately triggering industrial and economic growth throughout the country.