Pakistan’s economic turnaround draws global investor interest: report
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Pakistani Navy personnel stand guard near a ship carrying containers at the Gwadar port, some 700km west of Karachi, during the opening ceremony of a pilot trade programme between Pakistan and China on November 13, 2016. — AFP
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According to a US publishing report, despite the ongoing tensions with India, Pakistan has gained an extraordinary economic recovery in the past two years, which has attracted the attention of international investors.
According to the report, the country has seen a “macroeconomic miracle”. While inflation was less than $ 40 annually, Eurobonds rose to 2031 to 80 cents on dollars. During this period, the benchmark KSE-100 index has also increased threefold.
In September 2023, the government and the International Monetary Fund (IMF) signed a $ 7 billion “stability contract”, of which more than $ 2 billion has already been distributed. Since joining the IMF in 1950, Pakistan has enrolled in 24 separate bailout programs.
“Pakistan is a good story.” “So well this is not a danger to us.”
The report further states that the recent military increase with India, which is currently under ceasefire, is unlikely to suffer from Pakistan’s economic recovery, but “the country’s own diligent defects” may be.
Pakistan is known for “boom and best bicycles in its entire history,” said Khalid Selmi, a manager of the emerging markets in the barracks.
The current phase of stability of Pakistan began after avoiding default in 2022-23. The period was marked by devastating floods, rising oil prices after the Russian-Ukrainian conflict, and significant domestic political volatility.
“Everyone believed that Pakistan would be default with Sri Lanka in 2023,” Woolton Capital Management Chief Investment Officer, Allison Graham, noted.
Instead, the State Bank of Pakistan implemented aggressive financial hardship, which increased interest rates from 10 % to 22 %. It put the economy in recession but successfully eliminated inflation.
Pakistan’s major lenders. Nevertheless, the total domestic product (GDP) increased by 2.5 % in 2024, and for the first time in the years, Pakistan acquired a current account surplus with a basic financial addition, except for interest payments.
“The balance of the current account is positive, and the basic financial surplus is additional,” Saeemi noted. “This is something we haven’t seen in many years.”
The report also confronted Pakistan’s backward industrial growth with the rise and pharmaceutical sectors of India. Pakistan’s exports are focused on low -cost goods such as cotton, costumes and cereals. Although the country is growing in IT outsourcing, annual foreign sales have increased to $ 3 billion, but it is still against India’s $ 200 billion tech exports.
Graham said that without climbing the value -added ladder, destiny and free -spending electoral cycles could have a rapid and breakdown of Pakistan. He said, “Pakistan is very fragile to the external shock.” When there is a rally, you need to be quick. “
Despite these challenges, Salami expressed hopefulness and remained “constructive” on Pakistan’s Eurobands. Silaimi stressed, “The government knows that if they are running, they deviate from this tetrop, they will not have external finance.”
Earlier, on May 9, the IMF’s executive board approved the immediate supply of about $ 1 billion to Pakistan under the Extension Fund Facility and allowed additional management of $ 1.3 billion flexibility and stability (RSF).
Pakistan received a $ 7 billion bailout program from the IMF last year and in March it was given a $ 1.3 billion climate loan.
The program is important for the Billion 350 billion economy, and Pakistan said it has created stability under the bailout, which has helped to prevent the default threat.
