Business
S&P Global expects State Bank to remain cautious on monetary policy despite economic benefits
Pakistan’s improving economic indicators are unlikely to trigger an immediate shift in monetary policy as inflation and external risks continue to weigh on the outlook and the State Bank of Pakistan (SBP) is expected to maintain a cautious approach, according to a new report by S&P Global Market Intelligence.
S&P Global Market Intelligence’s recent assessment indicates that the central bank’s decision to hold the policy rate at 11.5% was a wise move to safeguard macroeconomic stability.
The report stated Pakistan’s economy has shown indications of recovery but inflation remains over the central bank’s intended range, restricting the possibility for significant monetary easing.
S&P Global has warned that rising tensions in the Middle East, global commodity price volatility and the increasing impact of climate change continue to pose major risks to Pakistan’s economic prospects.
According to the analysis, Pakistan’s economy is expected to increase by 3.5 percent for the fiscal year 2027, aided by strengthening macroeconomic conditions and a stronger external sector performance.
It also estimates that the country’s foreign exchange reserves might touch $19.5 billion by December 2026, mostly backed by resilient workers’ remittances and reasonably limited current account deficit.
Higher remittance inflows are likely to enhance Pakistan’s external financing position and help reduce balance of payments concerns, S&P Global said.
S&P Global Principal Economist Ahmed Mobeen commented on the prognosis, stressing the importance of fiscal discipline, especially considering the country’s debt service obligations.
Economic conditions have improved, but “the State Bank will likely continue to give priority to price stability and watch closely for global and domestic risks before making any further policy changes”, he said.
Business
More than 700 trucks loaded with relief supplies have crossed into Afghanistan from Pakistan.
The United Nations said Sunday that more than 700 trucks delivering international humanitarian aid reached Afghanistan via Pakistan, despite a near-total shutdown of the land border between the two countries during skirmishes in October.
The convoy was transporting “food and other critical humanitarian items,” Olga Cherevko, spokesperson for the UN Office for the Coordination of Humanitarian Affairs (OCHA) in Afghanistan, told AFP.
“724 trucks of humanitarian cargo have crossed into Afghanistan thru Torkham, reaching families who need it most,” tweeted Mo Yahya, the United Nations Resident & Humanitarian Coordinator for Pakistan.
He also thanked Islamabad and “all those who made it possible for us to maintain the humanitarian lifeline”.
But in early August, the World Food Program (WFP) warned that acute child malnutrition had risen to crisis levels in Afghanistan this year.
WFP said approximately 14 million Afghans are facing acute hunger, following deadly earthquakes last year, several climate-related calamities this year and the return of millions of Afghans from Iran and Pakistan since 2023.
The conflict with Pakistan has caused the near-total closure of the land border between the two countries since October 2025, significantly disrupting logistical routes for the delivery of humanitarian aid, WFP Deputy Executive Director Carl Skau told AFP in May.
Business
SBP: Federal government debt swells by Rs18.8tr in 28 months
In the first 28 months of the current period, federal government debt soared by Rs18,832 billion, with considerable increases in both domestic and external borrowing, documents of the State Bank of Pakistan stated.
The documents revealed that the overseas debt of the federal government climbed by Rs2,066 billion and its internal debt by Rs16,766 billion from March 2024 to June 2026. The surge means an average daily increase in debt of more than Rs22.40 billion.
The data showed that the federal government’s debt stood at Rs64,810 billion by February 2024, the last month of the caretaker government. The government’s total debt increased by Rs18,832 billion to Rs83,642 billion by June 2026 over the next 28 months.
According to the State Bank, the federal government’s internal debt stood at Rs42,675 billion in February 2024, which climbed to Rs59,441 billion by June 2026.
Similarly, the external debt of the federal government was Rs22,134 billion in February 2024, which increased to Rs24,201 billion in June 2026.
Business
PSX starts week on strong note, adds 484 points
The Pakistan Stock Exchange (PSX) started the new business week on a high note with the benchmark index gaining 484.38 points in the session.
The current index was 0.27 percent higher than the previous close of 180,104.61 at 180,588.99.
The index hit an intraday high of 181,158.86 and a low of 180,393.34. Volume for the session was 113,603,577 shares.
Asian equities nudged up on Monday, boosted by Chinese stocks ahead of major economic data, with investors keeping a careful eye on oil prices following large gains last week amid a truce in the Gulf crisis.
The U.S. dollar dipped into two-month lows after a slew of underwhelming data, including an unexpected fall in retail sales, prompted markets to give up on bets for an impending rate hike from the Federal Reserve. The CME Group’s FedWatch program currently shows a 30% chance of a rate hike next month, down dramatically from over 50% a week ago.
MSCI’s broadest index of Asia-Pacific equities outside Japan (.MIAPJ0000PUS), opens new tab increased 0.5% while Japan’s Nikkei (.N225), opens new tab gained 0.3%.
The CSI300 index of Chinese blue-chips, opens new tab increased 0.8% and the Hang Seng index, opens new tab climbed 1.6% ahead of the release of China’s activity statistics for July later in the day.
Industrial output is forecast to fall to 4.8% from 5.3% before. But investors may be braced for a positive surprise as exports surged on strong global AI demand last month.
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