ISLAMABAD – Gold rates in Pakistan soared to new highs on Thursday after witnessing further gains amid increasing global prices.

According to Sarafa Association, the price of per tola gold moved up by Rs1,500 to settle at Rs277,000 while the price of 10-gram increased by Rs1,285 to settle at Rs237,482.

The yellow metal also registered upward trend in the international market as per ounce price increased by $12 to reach $2,647.

A day earlier, gold prices continued shattering records and it touched a new all-time high of Rs275,500 a tola on Wednesday.

The per tola climbed by Rs2,500, reaching Rs275,500, while 10 grams of gold increased by Rs2,144, bringing the total to Rs236,197.

NEW YORK – The International Monetary Fund (IMF) said that despite a significant decrease in inflation, Pakistan is facing major challenges.

The IMF issued a statement following the approval of Pakistan’s Extended Fund Facility by its Executive Board, saying that the first installment of $1 billion was disbursed.

According to the statement, the Executive Board approved a $7 billion loan under the Extended Fund Facility for Pakistan, which consists of a new loan program lasting 37 months. Economic growth in Pakistan has reached 2.4%, but the country continues to face significant challenges, including a difficult business environment, weak governance, and a limited tax base.

The IMF’s statement highlighted that Pakistan consistently implemented policies under the Stand-By Arrangement in 2023-24, taking important steps toward restoring economic stability. The growth rate reached 2.4% in fiscal year 2024, driven by activities in the agricultural sector, and inflation has significantly decreased to single digits.

The IMF said that appropriate fiscal and monetary policies have helped control the current account deficit, providing an opportunity to rebuild foreign exchange reserves. The reduction in inflation reflects improvements in both internal and external conditions.

The State Bank has cut the policy rate by 450 basis points since June, and a robust budget was presented in June 2024. Despite this progress, Pakistan’s vulnerabilities and issues remain serious.

The statement pointed out that the challenging business environment, weak governance, and excessive state intervention hinder investment. A narrow tax base makes it difficult to meet financial sustainability and social and developmental expenditure needs. Insufficient investment in health and education is inadequate for sustainable poverty alleviation, while a lack of infrastructure investment has limited economic potential.

The IMF emphasized that Pakistan is vulnerable to the effects of climate change and risks falling further behind other countries if appropriate reform adjustments are not prioritized.

The statement said that the aim of new IMF loan program is to restore macroeconomic stability, reform public enterprises, and improve the delivery of public services.

The program would also focus on infrastructure development and addressing the impacts of climate change. The continuous financial support from development partners would be crucial for the success of this program.

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.”