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Pakistan’s economy achieved stability following the agreement with the International Monetary Fund (IMF), according to S&P.COM

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7 months ago

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Regarding Pakistan, S&P Global Ratings has maintained its “CCC+” long-term sovereign credit rating and “C” short-term rating. Regarding the long-term rating, the prognosis is unchanged.

Pakistan would be able to pay its debts more easily because of the IMF agreement, which is predicted to increase foreign exchange reserves. Rollovers are still necessary for Pakistan to keep up its foreign debt, nevertheless.

Pakistan’s economy will continue to be under pressure from debt obligations, even in the face of stability. The economy may also be impacted by monetary policy, inflation, and uncertain circumstances.

On the other hand, the default risk has decreased due to the growth in foreign exchange reserves. Controlling current account deficits and foreign exchange flows is crucial for preserving economic stability.

To sustain Pakistan’s economic stability, the report stated that funds from the IMF, Saudi Arabia, the United Arab Emirates, and China must be rolled over on schedule.

Positively, Fitch Ratings raised Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from “CCC” to “CCC+” on July 29.

The Fitch Company stated in a statement on Monday that “the upgrade reflects greater certainty over the continued availability of external funding, in the context of Pakistan’s staff-level agreement (SLA) with the IMF on a new 37-month USD7 billion Extended Fund Facility (EFF).”

It issued a warning, saying, “Nevertheless, Pakistan’s significant funding needs leave it vulnerable if it fails to implement tough reforms, which could undermine program performance and funding.”

Given the substantial policy changes in the most recent budget for the fiscal year ending in June 2025 (FY25) and the solid track record of support, we think this will be possible.

According to Fitch, Pakistan’s nine-month standby arrangement with the global lender was effectively concluded in April for the last IMF program.

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The total amount of Pakistan’s liquid foreign reserves is $15.95 billion.

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As of February 14, Pakistan’s total liquid foreign reserves were $15,947.9 million, with the State Bank of Pakistan’s (SBP) holdings being $11,201.5 million.

Official figures for the week ending February 14, 2025, show that the central bank’s liquid foreign exchange reserves rose by $35 million to $11,201.5 million.

Commercial banks maintained net foreign reserves of $4,746.4 million during the period under review, according to the breakdown of foreign reserves.

The nation’s total liquid foreign reserves as of the week ending February 07, 2025, were $15,862.6 million.

Of these, the central bank held $11,166.6 million in foreign reserves, while commercial banks kept $4,696 million in net reserves.

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In January 2025, RDA inflows reach 9.564 billion USD.

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Remittances under the Roshan Digital Account (RDA) increased from US $9.342 billion at the end of 2024 to US $9.564 billion by the end of January 2025.

The most recent data issued by the State Bank of Pakistan (SBP) revealed that remittance inflows in January totaled US$222 million, compared to US$203 million in December and US$186 million in November 2024.

Millions of Non-Resident Pakistanis (NRPs), including those who own a Non-Resident Pakistan Origin Card (POC), desire to engage in banking, payment, and investing activities in Pakistan using these accounts, which offer cutting-edge banking options.

Nearly 778,697 accounts were registered under the scheme by the end of January 2025, according to the data.

By the end of January, foreign-born Pakistanis had contributed US $59 million to Roshan Equity Investment, US $479 million to Naya Pakistan Certificates, and US $799 to Naya Pakistan Islamic Certificates.

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FBR lowers Karachi’s built-up structure property valuation rates

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A year-by-year breakdown of the depreciation value of residential and commercial built-up properties is included in the updated property valuation rates for Karachi that the FBR has announced.

The notification said that built-up structural values on residential property will be gradually reduced.

A residential home’s built-up structure, which is five to ten years old, will lose five percent of its worth.

In a similar vein, constructions between the ages of 10 and 15 will lose 7.5% of their value, while those between the ages of 15 and 25 would lose 10%. Built-up structures that are more than 25 years old will be valued similarly to an open plot.

Furthermore, age will also be used to lower the valuation of built-up properties, such as apartments and flats.

Structures that are five to ten years old will depreciate by ten percent, while those that are ten to twenty years old will depreciate by twenty percent. A 30% depreciation will be applied to properties that are 20 to 30 years old, while a 50% reduction will be applied to those that are above 30 years old.

In terms of commercial built-up properties, buildings that are 10 to 15 years old will lose 5% of their value, while those that are 15 to 25 years old will lose 8%. The value of properties that are more than 25 years old will drop by 10%.

In contrast, there would be a 15% boost in the value of commercial properties in the Defence Housing Authority (DHA) that face any Khayaban.

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