Karachi: Alhamra Islamic Money Market Fund announced its financial results for the fiscal year ending June 30, 2024, underscoring a significant recovery in Pakistan's macroeconomic environment. The turnaround was attributed to Pakistan entering a new IMF program, securing a USD 3.00 billion Stand-by Arrangement (SBA) from the IMF in June 2023, which averted a looming default. The government demonstrated a firm commitment to IMF targets, enabling the successful completion of the program.

The caretaker government, appointed in August 2023, swiftly addressed speculative pressure on the currency, with the PKR/USD exchange rate spiking to a record high of 307 in the interbank market. The government took decisive measures to curb smuggling and misuse of Afghan Transit, leading to a recovery in the exchange rate. The PKR appreciated by 2.6% by the end of the fiscal year, closing at 278.3. Additionally, measures were implemented to manage external balances and monitor exchange rate payments, stabilizing fiscal accounts.

Pakistan’s current account deficit (CAD) dropped by 88% to USD 464 million for the fiscal year, down from USD 3.80 billion in the previous period. This reduction was driven by an 11.3% increase in exports and a 2.3% drop in imports, leading to a 17.0% improvement in the trade deficit. Pakistan’s foreign exchange reserves rose to USD 9.40 billion as of June 2024, doubling from USD 4.40 billion the previous year, primarily due to IMF inflows and support from multilateral sources.

However, inflation remained elevated, with the consumer price index (CPI) averaging 23.9%, compared to 29.0% the prior year. The depreciation of the rupee, coupled with hikes in energy prices to comply with IMF requirements, contributed to inflationary pressures. In response, the State Bank of Pakistan (SBP) reduced its policy rate by 150 basis points to 20.5% in June 2024, aiming to alleviate inflation expectations and stabilize the economy.

The country's GDP grew by 2.4% in FY24, led by the agriculture sector, which expanded by 6.3%, while services and industrial growth remained modest at 1.2%. According to information available from the Pakistan Stock Exchange (PSX), FBR tax collection increased by 29.6% to PKR 9.29 billion, though it fell short of the PKR 130.00 billion target.