Karachi: Pakistan Income Fund released its financial review for the year ending June 30, 2024, highlighting significant macroeconomic recovery for Pakistan. The country's turnaround was attributed to entering a new IMF program, following a Stand-by Arrangement (SBA) with the IMF, securing USD 3.00 billion in June 2023. The government’s unwavering commitment to the IMF targets was noted as a key factor in stabilizing the economy, enabling Pakistan to avert a looming default.

The caretaker government, which took office in August 2023, addressed speculative pressure on the currency, leading the exchange rate to peak at 307 PKR/USD in the interbank market. Government efforts against dollar smuggling and illegal activities, particularly involving the Afghan Transit, helped stabilize the currency, bringing it to 278.3 PKR by year-end, representing a 2.6% appreciation. The authorities implemented strict measures to manage the external balance, restoring fiscal stability.

The report showed the country's current account deficit (CAD) dropped by 88%, reaching USD 464 million for the fiscal year compared to a deficit of USD 3.80 billion in the prior period. This improvement was driven by an 11.3% rise in exports and a 2.3% drop in imports. Foreign exchange reserves also improved, climbing to USD 9.40 billion by the end of June 2024, compared to USD 4.40 billion a year prior, largely due to IMF and multilateral sources.

Despite these positive developments, inflation averaged 23.9% during the fiscal year, compared to 29.0% last year, driven by massive currency depreciation and increased food and energy prices. The government’s implementation of IMF conditions, such as raising electricity tariffs and gas prices, also contributed to inflationary pressures. In response, the State Bank of Pakistan (SBP) lowered the policy rate by 150 basis points to 20.5% in June 2024, seeking to curb inflation.

According to information available from the Pakistan Stock Exchange (PSX), GDP growth was recorded at 2.4%, with the agriculture sector expanding by 6.3%. Services and industrial growth, however, remained weak, growing by only 1.2%. FBR tax collections saw a 29.6% increase, reaching PKR 9.29 billion, though missing the PKR 130 billion target.