Latest news with #macroeconomicstability
Arab News
4 days ago
- Business
- Arab News
Pakistan stocks hit all-time high on 9-year low deficit, macro stability hopes
ISLAMABAD: The Pakistan Stock Exchange (PSX) soared to another all-time high as it surpassed the 143,000-point mark on Tuesday, with analysts linking the bullish trend to the country's 9-year low fiscal deficit and optimism about macroeconomic stability. The benchmark KSE-100 index jumped 984.52 points, or 0.69 percent, to close at 143,037.16 points, compared to the previous day's close of 142,052.64 points. The development came as Pakistan recorded a 5.38 percent deficit — its lowest in nine years — in fiscal year 2024-25 that ended in June, beating the government and the International Monetary Fund (IMF) estimates. The major contributors to the rally were Fauji Fertilizer Company (FFC), United Bank Limited (UBL), MCB Bank Limited (MCB), Hub Power Company (HUBC), and Engro Fertilizers Limited (EFERT), collectively adding 679 points. "Sentiment further strengthened as Pakistan reported a 9-year low fiscal deficit of 5.38 percent in FY25, with 36 percent YoY (year-on-year) revenue growth outpacing an 18 percent rise in expenditures," the Karachi-based Topline Securities firm said in its market review. "Investor confidence was fueled by local and foreign inflows and gains across many sectors of the market," it said. "The market's upward trajectory reflects optimism over fiscal discipline, macroeconomic stability and a stronger earnings outlook, setting the stage for sustained momentum in the sessions ahead." Overall, the PSX recorded a trading volume of 548 million shares, with a turnover of Rs37 billion. Ahsan Mehanti, the CEO of Arif Habib Commodities, attributed the rally to the government's fiscal policies. "Government approval to resume subsidies for fully funded remittances scheme to ensure rupee stability, surging global equities, speculations over government resolve to end power sector circular debt crisis played a catalyst role in the bullish close," he told Arab News. The development comes amid a broader macroeconomic turnaround for Pakistan, which is currently in its first year of a $7 billion IMF loan program approved in September 2024 to stabilize the economy, increase revenues and curb inflation after a prolonged balance of payments crisis. According to Topline Securities, non-tax revenues have surged 66% year-on-year, led by a robust dividend of Rs2.62 trillion from the central bank, the State Bank of Pakistan, up from Rs0.97 trillion in FY24. Meanwhile, tax revenues grew 26%, driven primarily by gains in collections by the Federal Board of Revenue (FBR). 'In the last 5 years, FBR revenues (including Petroleum Development Levy) have increased 3.02x from Rs4.3 trillion in FY20 to Rs12.9 trillion in FY25,' the report noted, adding that over the same period, GDP rose from Rs41 trillion to Rs114.6 trillion. The FBR's tax-to-GDP ratio rose to 11.3% in FY25, a seven-year high compared to 9.7% last year. 'This is higher than the average of 9.9% recorded between FY20 to FY24,' the brokerage said, noting that higher Petroleum Development Levy collections may have substituted for sales tax to avoid revenue-sharing obligations with provinces. Pakistan also recorded a primary surplus of 2.4% of GDP in FY25 – the highest in more than two decades – as revenue growth outpaced expenditures. This exceeded both the government's revised projection of 2.2% and the IMF's forecast of 2.1%. 'Higher primary surplus is achieved as revenue growth surpassed the expenditures growth,' Topline Securities said. Interest expenses as a percentage of FBR taxes declined to 76% in FY25 from 88% in FY24, reflecting better debt management. 'The improvement in debt servicing is on the back of controlled growth — 9% in interest expenses — due to lower interest rates,' the report said. Development spending also rose, with the Public Sector Development Program (PSDP) reaching 2.6% of GDP, its highest in five years, though still well below the 5% peak recorded in FY2017. Looking ahead, Topline Securities said, it expected the government to continue on a path of fiscal consolidation. 'Pakistan is expected to post [a] third consecutive year of primary surplus in FY26 after two decades,' it said. 'While overall fiscal deficit is expected to clock in at 4.0–4.1% of GDP in FY26, [the] lowest in two decades.' The improved fiscal performance is likely to strengthen Islamabad's case in ongoing negotiations with the IMF and other international creditors as it seeks long-term debt sustainability and economic recovery.
Zawya
28-07-2025
- Business
- Zawya
IMF board approves Zambia programme review, unlocking about $184mln
The International Monetary Fund said on Friday its executive board had completed a fifth review of Zambia's loan programme, unlocking another disbursement of about $184 million. The fund said the loan programme would seek to "entrench macroeconomic stability, restore debt and fiscal sustainability, enhance public governance, and foster inclusive growth" for Zambia. The copper-rich Southern African country is recovering from a severe regional drought, which curbed economic growth after years of protracted debt-restructuring negotiations. Zambia battled its way to a restructuring deal with its primary creditors last year. It has yet to agree terms with some smaller creditors including Afreximbank. Its finance ministry expects growth to pick up 5.8% this year and 6.4% in 2026. Analysts do not foresee U.S. President Donald Trump's 50% tariff on copper being a major drag on growth as exports to the U.S. are limited and volatility in the copper price is expected to be temporary. (Reporting by Kopano Gumbi and Abu Sultan; Editing by Chris Reese and David Gregorio)
Zawya
28-07-2025
- Business
- Zawya
Fitch affirms Saudi Arabia's A+ credit rating with stable outlook
RIYADH — Fitch Ratings has affirmed Saudi Arabia's long-term foreign currency issuer default rating at A+ with a stable outlook, highlighting the Kingdom's strong fiscal position and continued reform momentum. In its latest report, the international rating agency said Saudi Arabia's credit rating reflects the robustness of its financial fundamentals. It noted that key indicators —such as the sovereign net foreign asset position and the debt-to-GDP ratio— are significantly stronger than the averages for countries in the "A" and even "AA" rating categories. Fitch emphasized that the Kingdom holds substantial financial reserves in the form of public sector deposits and other assets, supporting its macroeconomic stability. Looking ahead, the agency projected that Saudi Arabia's sovereign net foreign assets will remain a cornerstone of its credit strength, reaching 35.3% of GDP by 2027. This figure stands well above the average for countries rated 'A,' which is just 3.1% of GDP. Fitch also pointed to the ongoing fiscal reforms undertaken by the Saudi government, aimed at improving budget flexibility and reducing dependence on oil revenues. The agency said these reforms, along with a sustained rise in non-oil revenues, continue to reinforce the Kingdom's credit profile. © Copyright 2022 The Saudi Gazette. All Rights Reserved. Provided by SyndiGate Media Inc. (
Zawya
03-07-2025
- Business
- Zawya
Ghana: Statement on the Payment of US$349.52 Million Eurobond Debt Service
The Ministry of Finance wishes to officially inform the public that the Government of Ghana has, through the Bank of Ghana, successfully effected a payment of US$349,523,674.56 in respect of Eurobond debt service obligations today, Thursday, 3rd July 2025. Since the conclusion of Ghana's Eurobond debt restructuring in October 2024, the Government of Ghana has cumulatively serviced US$1,174.64 million in Eurobond debt payments as follows: In October 2024, the government made an initial payment of US$475.60 million, covering obligations due under the restructuring agreement, including the first post-restructuring debt service. In January 2025, the government paid US$349.52 million. And now, in July 2025, a further US$349.52 million has been paid This brings Ghana fully up to date on all scheduled Eurobond debt service obligations for 2025. Looking ahead to 2026, a total debt service of US$1,409.06 million is scheduled. This timely payment reaffirms Ghana's commitment to macroeconomic stability, prudent debt management, and constructive engagement with external creditors. It is expected to: Positively influence Ghana's credit ratings trajectory in the months ahead, as it demonstrates continued discipline in debt servicing post-restructuring. Boost investor confidence in Ghana's sovereign credit profile and economic recovery programme. Support foreign exchange market stability, as it has been incorporated into the Bank of Ghana's reserves and liquidity management strategy. Distributed by APO Group on behalf of Ministry of Finance - Republic of Ghana.
Arab News
01-07-2025
- Business
- Arab News
Pakistan stock market surged by 60 percent year-on-year in FY25— report
ISLAMABAD: Pakistan's benchmark KSE-100 Index rose by 60 percent during the outgoing fiscal year, a top brokerage firm said in its report this week, crediting the stock market's impressive performance to macroeconomic stability, improved credit ratings and 'aggressive' easing of the monetary policy. Pakistan has undertaken a series of International Monetary Fund-recommended structural reforms and fiscal adjustments aimed at stabilizing the economy since it came to the brink of a sovereign default in 2023. These measures have led to increasing macroeconomic stability, reduced inflation and improved ratings from international credit agencies. 'Pakistan's benchmark KSE-100 index is up 60 percent YoY in PKR terms and 57 percent in USD terms in FY25,' Topline Securities, a Karachi-based top brokerage firm, said on Monday. The report said that over the past two fiscal years (FY24 and FY25), the PSX has recorded a total gain of 203 percent in terms of the Pakistani rupee and 206 percent in terms of the US dollar. It credited the Pakistan Stock Exchange's (PSX) rise to macroeconomic stability achieved by the country after it secured a $7 billion International Monetary Fund's (IMF) loan program. Topline Securities said other factors contributing to the 'remarkable rally' at the stock market are the completion of the IMF's first review by Pakistan in March, the central bank's 'aggressive' monetary easing from 20.5 percent to 11 percent, and improvement in the country's credit rating by Fitch from CCC+ to B-. 'As per Bloomberg data, Pakistan's market was the 8th best performer in FY25 with a total USD return of 57 percent,' the report said. 'However, over the cumulative two-year period (FY24 and FY25), it ranked as the best-performing market in the world.' The report noted that average traded volumes in the cash/ready market increased by 37 percent YoY to an average of 631 million shares per day during FY25, adding that the average traded value also jumped by 80 percent YoY to Rs28 billion per day. The report warned Pakistan may face pressure in achieving its revenue targets for FY26 but said it expected the government to pass the IMF's program reviews in a timely manner by meeting the lender's objectives. This, the report said, Islamabad would achieve through cutting development and other non-essential expenditures. Topline Securities said it also expected a credit rating upgrade for Pakistan in the current fiscal year. 'The rating upgrade in our view is quite likely as debt ratios and FX reserves are showing improvements,' the report said. 'With the credit rating upgrade to 'B' category, Pakistan may resort to the international bond market by issuing Eurobond and Sukuks which will further support FX reserves and strengthen the debt maturity profile of the country,' it added. The report pointed out that any developments in Pakistan–US relations under President Donald Trump's administration, along with regional tensions, could 'significantly influence market sentiment.' 'Currently, a ceasefire is in place between India and Pakistan; however, any escalation could negatively affect investor confidence,' it said. It also warned that any further conflict in the Middle East is likely to have broader macroeconomic implications for Pakistan amidst its dependency on oil imports, which could then weigh on the stock market's performance.
