Karachi: The Board of Directors of ABL Asset Management Company Limited has released the financial statements for the ABL Income Fund (ABL-IF) for the year ending June 30, 2025. The report highlights a year of solid growth and macroeconomic stability for Pakistan, driven by policy reforms and favorable external conditions.

For fiscal year 2025, Pakistan's macroeconomic environment indicated a significant shift, marked by a decrease in inflation and a return to current account surpluses. The real GDP increased by 2.68%, a slight improvement from the previous year's 2.51%, with the industrial sector showing a robust recovery at 4.77% growth. Inflation, which was a major concern in previous years, averaged at 4.61% in FY25, a notable decrease from 23.9% in FY24.

The ABL Income Fund posted an annualized return of 16.55%, surpassing the benchmark return of 13.79% by 276 basis points. The fund's net assets saw a 9.24% increase, amounting to PKR 4,073.42 million by the end of FY25. This growth was attributed to strategic asset allocation, with significant holdings in Pakistan Investment Bonds (PIBs), Term Finance Certificates (TFCs)/Sukuk, government-backed securities, and cash.

According to information available from the Pakistan Stock Exchange (PSX), the open-end mutual fund industry experienced substantial growth, with assets under management increasing by 44.02% year-on-year. This growth was driven by positive investor sentiment and a favorable outlook for capital markets, despite some declines in Capital Protected Funds and Shariah Compliant Fund of Funds.

The State Bank of Pakistan's monetary policy adjustments also played a key role in this economic environment. The policy rate, which began the fiscal year at 20.5%, was reduced to 11.0% by May 2025, reflecting a total easing of 950 basis points. This monetary easing was instrumental in supporting macroeconomic stability and investor confidence.

On the external front, the current account posted a cumulative surplus of USD 2.1 billion, a marked turnaround from the previous year's USD 2.07 billion deficit. Worker remittances increased to USD 38.3 billion in FY25, and foreign exchange reserves rose to USD 19.27 billion by June 2025, bolstered by multilateral inflows and improved market sentiment.

The fiscal performance was also noteworthy, with the Federal Board of Revenue reporting provisional tax collections of PKR 11.72 trillion. The government's FY26 Federal Budget emphasized revenue expansion and fiscal discipline, aligning with International Monetary Fund (IMF) benchmarks and setting the stage for further economic reforms.

In summary, FY25 marked a pivotal year for Pakistan's economy, characterized by stabilizing macroeconomic indicators and renewed investor optimism. As the country moves into FY26, continued focus on structural reforms and support from international partners will be crucial for sustaining this growth trajectory.