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ISLAMABAD: Saudi Arabia agreed Friday to extend the maturity of a $3 billion deposit held at Pakistan&#39;s central bank, delivering a fresh boost to Islamabad&#39;s foreign exchange reserves. According to a post on X (Twitter), the Ministry of Finance reported that the Saudi Fund for Development and the State Bank of Pakistan signed the extension agreement on the sidelines of the World Bank-IMF Spring Meetings in Washington. <div class="fr-embed"><div class="twitter-tweet twitter-tweet-rendered" style="display: flex; max-width: 550px; width: 100%; margin-top: 10px; margin-bottom: 10px;"><iframe id="twitter-widget-0" scrolling="no" frameborder="0" allowtransparency="true" allowfullscreen="true" style="position: static; visibility: visible; width: 550px; height: 672px; display: block; flex-grow: 1;" title="X Post" src="https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-0&features=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%3D%3D&frame=false&hideCard=false&hideThread=false&id=2044950727072809149&lang=en&origin=https%3A%2F%2Fmain.d1wrm1qseko1cp.amplifyapp.com%2Farticles%2F5340%2F&sessionId=24a6d90f2e85ae93786957329068a0fc0d5d343d&theme=light&widgetsVersion=2615f7e52b7e0%3A1702314776716&width=550px" data-tweet-id="2044950727072809149"></iframe></div></div> Finance Minister Muhammad Aurangzeb and Pakistan&#39;s Ambassador to the United States Rizwan Saeed Sheikh witnessed the signing. SFD Chief Executive Sultan bin Abdulrahman Al-Marshad signed on behalf of the Saudi fund. State Bank of Pakistan Governor Jameel Ahmad signed for the central bank. The ministry said the extension reflects the &quot;strong and longstanding economic partnership&quot; between Pakistan and Saudi Arabia and will further support Pakistan&#39;s external sector stability. Friday&#39;s agreement comes amid a broader shift in the two countries&#39; financial relationship. In April 2024, Pakistan and Saudi Arabia agreed to expedite a $5 billion investment package representing a transition from loans to equity stakes in Pakistani projects, according to the Ministry of Foreign Affairs. In October 2024, the two sides signed 34 business agreements worth $2.8 billion across agriculture, energy, and information technology, as per AFP. Saudi-based ACWA Power has committed to renewable energy projects worth $2 billion in Pakistan, per the Federation of Pakistan Chambers of Commerce and Industry. On October 28, 2025, Prime Minister Shehbaz Sharif and Crown Prince Mohammed bin Salman launched the Economic Cooperation Framework to steer the relationship toward joint ventures in mining, information technology, and tourism. The two countries also signed a Mutual Defence Pact in September 2025. Saudi Arabia&#39;s financial support for Pakistan spans decades. Following Pakistan&#39;s 1998 nuclear tests, Saudi Arabia cushioned the impact of international sanctions through deferred oil payments, per Federation of Pakistan Chambers of Commerce and Industry (FPCCI). After the 2005 earthquake in northern Pakistan, Saudi Arabia delivered an aid package of $573 million, and during the 2010 floods became Pakistan&#39;s largest international donor, pledging $105 million, according to FPCCI. Total trade between the two countries stands at $3.5 billion, with Pakistan&#39;s imports from Saudi Arabia at $3.2 billion against exports of just $316.3 million, according to FPCCI. Saudi Arabia remains Pakistan&#39;s largest source of remittances. Over 2.7 million Pakistani workers reside in the Kingdom, generating approximately $9 billion annually, roughly 25% of Pakistan&#39;s total global inflows.

Minister for Finance and Revenue Muhammad Aurangzeb witnesses the signing of an agreement in Washington extending a $3 billion deposit between the Saudi Fund for Development and the State Bank of Pakistan on April 17, 2026. (Ministry of Finance/X)

Economy

Saudi Arabia extends maturity of $3 billion deposit at Pakistan’s central bank as officials sign agreement in Washington during World Bank-IMF Spring Meetings.

Saudi Arabia extends $3B deposit to bolster Pakistan's economy

ISLAMABAD: Pakistan achieved consecutive positive credit ratings from Fitch Ratings for the first time in years on Monday. This development comes as the country&#39;s foreign exchange reserves have nearly doubled, inflation has declined, and borrowing costs have reached their lowest levels in recent memory. These significant improvements would have been hard to predict when the nation was on the brink of default in 2023. Fitch upgraded Pakistan from &#39;CCC+&#39; to &#39;B-&#39; in April 2025. This year, it affirmed that rating with a &quot;Stable Outlook,&quot; a result that shows that last year&#39;s gains were not a one-off. The reserve picture alone marks a transformation. Gross foreign exchange reserves stood at less than $8 billion in early 2023. By March 2025, they had recovered to just under $18 billion. By February, they reached $28.4 billion, with non-gold reserves rising $5.1 billion year-on-year to $17.5 billion. Inflation has undergone an equally steep reversal. Consumer prices averaged above 23% in FY24. Fitch projected 5% for FY25. The FY26 forecast of 7.9% is higher, driven by global energy pressures, but it remains a fraction of where Pakistan stood two years ago. The State Bank of Pakistan cut its policy rate from 22% in May 2024 to 12% by early 2025, then to 10.5% by the end of 2025. Market rates fell in tandem, easing costs across the economy and helping push GDP growth from 3% in FY25 to a projected 3.1% in FY26. Fiscal gains have compounded. Pakistan&#39;s primary surplus more than doubled in FY25, exceeding 2% of GDP. It is projected at 2.1% in FY26. Government debt as a share of GDP is forecast to fall to 68.9% in FY26 from 70.7% in FY25. Provincial governments have legislated increases in agricultural income tax, a structural benchmark that was unresolved at the time of the 2025 upgrade. Pakistan has also deepened its relationship with the IMF considerably. One program review had been completed when Fitch issued last year&#39;s upgrade. Three have now been completed, and a March staff-level agreement is set to unlock a combined $1.2 billion pending board approval. Risks remain real. Pakistan sources up to 90% of its oil from the Gulf, leaving it exposed to the Middle East conflict and potential disruptions in the Strait of Hormuz. External debt amortizations are expected to rise to $12.8 billion in FY26 from roughly $8 billion in FY25. Fitch said a downgrade would follow a sharp drawdown in reserves or fiscal slippage. An upgrade requires sustained reserve gains and structural improvements in tax revenue.

Pakistanis shop at a market for the Eid al-Fitr celebrations during the last week of the Islamic holy fasting month of Ramadan in Karachi on March 17, 2026. (AFP)

Fitch maintained Pakistan’s B- rating with a 'Stable Outlook' as reserves rose to $28.4 billion, inflation eased, interest rates fell, and fiscal balances improved.

Pakistan posts back-to-back credit wins as economy improves

ISLAMABAD: Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan visited Pakistan this week for talks centered on bilateral economic ties and ongoing financial cooperation between the two countries, the Finance Ministry stated Saturday. In an official statement on X (Twitter), the ministry stated that Pakistan&rsquo;s Federal Minister for Finance and Revenue Muhammad Aurangzeb personally escorted his Saudi counterpart to Islamabad International Airport upon his departure on Friday. <div class="fr-embed"><div class="twitter-tweet twitter-tweet-rendered" style="display: flex; max-width: 550px; width: 100%; margin-top: 10px; margin-bottom: 10px;"><iframe id="twitter-widget-0" scrolling="no" frameborder="0" allowfullscreen="true" style="position: static; visibility: visible; width: 550px; height: 672px; display: block; flex-grow: 1;" title="X Post" src="https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-0&features=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%3D%3D&frame=false&hideCard=false&hideThread=false&id=2042824446013247809&lang=en&origin=https%3A%2F%2Fmain.d1wrm1qseko1cp.amplifyapp.com%2Farticles%2F5223%2F&sessionId=34e7eff16c3aa34b759e948f3c58ce11e5be3e0f&theme=light&widgetsVersion=2615f7e52b7e0%3A1702314776716&width=550px">&nbsp;</iframe></div></div><div class="fr-embed"><div> The two ministers had exchanged remarks on the bilateral relationship and the state of economic cooperation between Pakistan and Saudi Arabia.</div></div> Pakistan&rsquo;s finance minister said he plans to meet Al-Jadaan again on the sidelines of the&nbsp;<a href="https://www.pakistantv.com/article/pakistan-minister-to-discuss-reform-progress-during-imf-meetings-in-washington" target="_blank" style="color:#0073e6;" rel="noopener noreferrer">World Bank Group&ndash;IMF Spring Meetings</a>&nbsp;in Washington. The gathering, set for April 13&ndash;18, will bring together central bankers, government ministers and other stakeholders to discuss economic growth, debt and geopolitical shifts. The visit comes as Islamabad is navigating an unusually intense diplomatic calendar. US Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf both arrived in the Pakistani capital on Saturday for&nbsp;<a href="https://www.pakistantv.com/article/islamabad-talks" target="_blank" style="color:#0073e6;" rel="noopener noreferrer">Pakistan-mediated talks</a>&nbsp;over a ceasefire set to expire on April 22, 2026. Pakistan&#39;s Prime Minister Shehbaz Sharif described those talks as a &quot;make-or-break moment,&quot; a backdrop that lends additional weight to&nbsp;<a href="https://www.pakistantv.com/article/five-things-to-know-about-the-planned-iranus-talks-in-islamabad" target="_blank" style="color:#0073e6;" rel="noopener noreferrer">Islamabad&#39;s engagements</a>&nbsp;on the economic front with one of its closest Gulf partners.

Pakistan Minister for Finance and Revenue Muhammad Aurangzeb, left, talks with Saudi Arabia Finance Minister Mohammed bin Abdullah al-Jadaan during a high-level meeting in Islamabad, Pakistan, Friday, April 10, 2026. (Ministry of Finance/X)

Saudi Finance Minister Al-Jadaan met his Pakistani counterpart in Islamabad, with both sides planning to follow up at the World Bank Group–IMF Spring Meetings in Washington.

Saudi finance minister holds talks in Pakistan on economic cooperation

ISLAMABAD: Pakistan&#39;s renewable energy capacity shielded the country from an energy crisis despite regional oil supply disruptions, Prime Minister Shehbaz Sharif said Tuesday, as the government moves to accelerate a sweeping clean energy expansion and protect export routes to Gulf markets. According to an official statement released by the Prime Minister&rsquo;s Office, PM Sharif chaired a meeting on long-term power supply planning and the outlook for domestic exports amid current international pressures. He directed officials to formulate a comprehensive national action plan to expand renewable energy sources. He also ordered the Pakistan National Shipping Corporation to arrange vessels to boost export volumes through sea routes. Renewables currently account for 55% of Pakistan&#39;s total electricity generation, with fossil fuels making up the remaining 45%. The government is targeting a 90% renewable share within ten years, with biofuels comprising the remaining 10%. The prime minister ordered work on the Battery Energy Storage System project to be fast-tracked. &quot;Solar energy and other renewable energy sources are the future of the power sector,&quot; he said. On trade, PM Sharif said Pakistani exports to Gulf countries have continued despite recent global tensions. He credited diplomatic efforts for securing uninterrupted access to those markets. Demand for Pakistani agricultural commodities in the Gulf has risen steadily, officials reported during the briefing. The meeting was attended by Deputy Prime Minister and Foreign Minister Ishaq Dar, along with federal ministers Ahsan Iqbal, Dr Mosaddeq Masood Malik, Muhammad Aurangzeb and Attaullah Tarar, Minister of State for Finance Bilal Azhar Kayani and other senior officers.

Prime Minister Shehbaz Sharif chairs a meeting regarding long term energy planning and export strategy during current international situation, in Islamabad on 7 April 2026. (PMO)

Pakistan’s renewable energy now generates 55% of electricity, shielding it from regional oil disruptions. PM Shahbaz Sharif aims for 90% renewables in a decade while securing Gulf export routes.

Pakistan to expand renewable energy to shield economy, exports amid Middle East crisis

ISLAMABAD: The International Monetary Fund (IMF) reached a staff-level agreement with Pakistan on Thursday, unlocking roughly $1.2 billion in financing pending board approval, the international financial institute said Friday. According to a statement released by IMF Communications Department, the agreement concludes the third review of a 37-month Extended Fund Facility and the second review of a 28-month Resilience and Sustainability Facility arrangement. Pakistan would draw approximately $1 billion from the EFF and $210 million from the RSF once the board signs off. Cumulative payouts across both programs would then stand at around $4.5 billion. <div class="fr-embed"><div class="twitter-tweet twitter-tweet-rendered" style="display: flex; max-width: 550px; width: 100%; margin-top: 10px; margin-bottom: 10px;"><iframe id="twitter-widget-0" scrolling="no" frameborder="0" allowfullscreen="true" style="position: absolute; visibility: hidden; width: 0px; height: 0px; display: block; flex-grow: 1;" title="X Post" src="https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-0&features=eyJ0ZndfdGltZWxpbmVfbGlzdCI6eyJidWNrZXQiOltdLCJ2ZXJzaW9uIjpudWxsfSwidGZ3X2ZvbGxvd2VyX2NvdW50X3N1bnNldCI6eyJidWNrZXQiOnRydWUsInZlcnNpb24iOm51bGx9LCJ0ZndfdHdlZXRfZWRpdF9iYWNrZW5kIjp7ImJ1Y2tldCI6Im9uIiwidmVyc2lvbiI6bnVsbH0sInRmd19yZWZzcmNfc2Vzc2lvbiI6eyJidWNrZXQiOiJvbiIsInZlcnNpb24iOm51bGx9LCJ0ZndfZm9zbnJfc29mdF9pbnRlcnZlbnRpb25zX2VuYWJsZWQiOnsiYnVja2V0Ijoib24iLCJ2ZXJzaW9uIjpudWxsfSwidGZ3X21peGVkX21lZGlhXzE1ODk3Ijp7ImJ1Y2tldCI6InRyZWF0bWVudCIsInZlcnNpb24iOm51bGx9LCJ0ZndfZXhwZXJpbWVudHNfY29va2llX2V4cGlyYXRpb24iOnsiYnVja2V0IjoxMjA5NjAwLCJ2ZXJzaW9uIjpudWxsfSwidGZ3X3Nob3dfYmlyZHdhdGNoX3Bpdm90c19lbmFibGVkIjp7ImJ1Y2tldCI6Im9uIiwidmVyc2lvbiI6bnVsbH0sInRmd19kdXBsaWNhdGVfc2NyaWJlc190b19zZXR0aW5ncyI6eyJidWNrZXQiOiJvbiIsInZlcnNpb24iOm51bGx9LCJ0ZndfdXNlX3Byb2ZpbGVfaW1hZ2Vfc2hhcGVfZW5hYmxlZCI6eyJidWNrZXQiOiJvbiIsInZlcnNpb24iOm51bGx9LCJ0ZndfdmlkZW9faGxzX2R5bmFtaWNfbWFuaWZlc3RzXzE1MDgyIjp7ImJ1Y2tldCI6InRydWVfYml0cmF0ZSIsInZlcnNpb24iOm51bGx9LCJ0ZndfbGVnYWN5X3RpbWVsaW5lX3N1bnNldCI6eyJidWNrZXQiOnRydWUsInZlcnNpb24iOm51bGx9LCJ0ZndfdHdlZXRfZWRpdF9mcm9udGVuZCI6eyJidWNrZXQiOiJvbiIsInZlcnNpb24iOm51bGx9fQ%3D%3D&frame=false&hideCard=false&hideThread=false&id=2037723932879716834&lang=en&origin=https%3A%2F%2Fmain.d1wrm1qseko1cp.amplifyapp.com%2Farticles%2F4953%2F&sessionId=e1b7b50440a792e14968d3461c374ec3c99eddd9&theme=light&widgetsVersion=2615f7e52b7e0%3A1702314776716&width=550px"></iframe></div><blockquote class="twitter-tweet">IMF Reaches Staff-Level Agreement on the Third Review for the 37-month Extended Arrangement under the Extended Fund Facility (EFF) and the Second Review for 28-month Arrangement Under the Resilience and Sustainability Facility (RSF) &ndash; Pakistan <a href="https://t.co/hYPsALIpbn" style="color: rgb(0, 115, 230);">https://t.co/hYPsALIpbn</a>&mdash; Ministry of Finance, Government of Pakistan (@Financegovpk) <a href="https://twitter.com/Financegovpk/status/2037723932879716834?ref_src=twsrc%5Etfw" style="color: rgb(0, 115, 230);">March 28, 2026</a></blockquote></div> The deal remains subject to approval by the Fund&#39;s Executive Board. Iva Petrova led the IMF delegation during in-person talks with Pakistani officials in Karachi and Islamabad from Feb. 25 to March 2. Discussions continued remotely in the weeks that followed. The Fund described Pakistan&#39;s near-term economic outlook as improving. Output picked up pace in the first part of the current fiscal year, following a broader rebound in FY25. Price pressures and the trade balance have stayed manageable, and the country&#39;s foreign reserve position has continued to recover, the IMF noted. The Fund warned that ongoing conflict in the Middle East poses the most immediate threat to that trajectory. Swings in global energy costs and tightening international financing conditions could reignite inflation and drag on output. According to the IMF, Pakistan&#39;s fiscal targets call for a primary surplus of 1.6% of GDP in FY26, rising to an underlying primary balance of 2% of GDP in FY27. Hitting those marks will require widening the revenue base and tightening control over public spending. The Fund said health, education, and social assistance allocations are also set to increase. The country&rsquo;s Federal Board of Revenue (FBR) has launched an internal overhaul to improve tax collection and enforcement. Changes underway include tougher audit procedures, a broader rollout of electronic invoicing, and closer monitoring of production activity. A newly created Tax Policy Office has been tasked with drafting a longer-term reform roadmap aimed at keeping the policy environment stable without sacrificing revenue. Similarly, the State Bank of Pakistan (SBP) has signaled it will hold policy rates at elevated levels for as long as needed to keep inflation within its official band. The IMF said the local currency should be allowed to move freely in response to external pressures. A market-determined exchange rate, the Fund said, remains the country&#39;s first line of defense against balance of payments stress,&nbsp;particularly given potential fallout from the Middle East conflict. Pakistan&#39;s power sector remains a central focus of the program. Authorities have committed to closing the gap between the actual cost of electricity and what consumers are charged. The IMF said this structural imbalance is the root cause of the country&#39;s persistent circular debt problem. The Fund reported that Pakistan authorities are also working to strengthen the Benazir Income Support Program, the country&rsquo;s flagship federal social safety net. Measures include inflation-adjusted cash transfers, expanded coverage, and improved payment systems. Under the RSF, Pakistan has moved ahead on reducing transport-related emissions and building regulatory infrastructure to track and manage climate-related financial risks. Upcoming commitments include reinforcing water infrastructure, improving accounting for climate-relevant public expenditure, and establishing a formal framework for financing disaster response.

A view of the International Monetary Fund headquarters building in Washington, DC on October 20, 2024 ahead of the 2024 IMF/World Bank Annual Meetings. (AFP)

The deal remains subject to approval by the Fund's Executive Board.

IMF clears $1.2 billion for Pakistan in dual program review

Faraz Saeed

LAHORE: Pakistan recorded a current account surplus of $427 million in February, marking its strongest monthly performance since March last year, according to data released by the State Bank of Pakistan.&nbsp; The latest figure also represents the second consecutive monthly surplus, following January&rsquo;s $60 million surplus, signalling a gradual improvement in the country&rsquo;s external position. Despite the recent gains, the broader picture remains mixed. During the first eight months of the current fiscal year (July-February FY26), Pakistan posted a cumulative current account deficit of $700 million, sharply contrasting with the $479 million surplus recorded in the same period last year. Officials, however, see the recent trend as encouraging. The finance minister&rsquo;s advisor, Khurram Shehzad, described February&rsquo;s numbers as a sign of strengthening fundamentals, pointing to robust remittance inflows, growth in value-added exports, and controlled import expansion as key drivers behind the improvement. Analysts echo this view, noting that higher remittances and a reduction in the income deficit played a crucial role in offsetting the persistent trade gap. The narrowing of external imbalances has also helped ease pressure on foreign financing needs. While risks remain, particularly due to ongoing regional tensions, the back-to-back surpluses suggest that Pakistan&rsquo;s external account is stabilizing.&nbsp; With adequate buffers in place, the development is being seen as a step toward sustainable economic recovery and a potential boost to investor confidence.

A stock broker walks past a digital board showing share prices at the Pakistan Stock Exchange (PSX) in Karachi on March 10, 2026. (AFP)

Business

Pakistan posted back-to-back current account surpluses, led by strong remittances and controlled imports, signalling improving external stability despite a year-to-date deficit.

Pakistan’s current account surplus hits 11-month high in February

Ayesha Mir

ISLAMABAD: Pakistan is fully prepared for the upcoming review by the International Monetary Fund and is confident about its economic trajectory, Finance Minister Muhammad Aurangzeb said.&nbsp;Speaking to Pakistan TV Digital, Aurangzeb confirmed that the IMF mission has begun its technical discussions in Karachi and that he will meet the team in Islamabad on Monday for the third review under Pakistan&rsquo;s ongoing program.&nbsp;&ldquo;We are getting ready for the third review,&rdquo; Aurangzeb said. &ldquo;It will cover both performance benchmarks and structural benchmarks, as well as a forward-looking assessment of the program.&rdquo;&nbsp;He added that Pakistan is entering the review from a position of strength. &ldquo;It is premature to say how it will go,&rdquo; he said. &ldquo;But I would say we are well-positioned for this review.&rdquo;&nbsp;Strong economic fundamentalsAurangzeb highlighted the country&rsquo;s consolidation of macroeconomic stability over the past two years. Consecutive primary fiscal surpluses, a stable currency, easing inflation, and rising foreign exchange reserves reflect these gains, he said.&nbsp;Inflation has fallen into single digits, allowing the policy rate to drop to 10.5%, while reserves have grown from roughly two weeks of import cover in July 2023 to about 2.5 months.&nbsp;&ldquo;If the current trajectory continues, we expect to reach the international benchmark of three months of import cover by year-end,&rdquo; he said.&nbsp;Remittances rose to $38 billion last fiscal year and are projected to reach around $42 billion this year. IT exports are also strengthening, expected to reach $4 billion to $5 billion, alongside traditional export sectors.&nbsp;From aid-led to investment-led growthAurangzeb emphasized that Pakistan is shifting from an aid-led model to a trade and investment-focused approach, targeting business-to-business engagement with international partners.&nbsp;&ldquo;We are very focused on sectors like oil and gas, minerals, mining and IT to attract further trade and investment,&rdquo; he said.&nbsp;He noted recent diplomatic and economic initiatives, including CPEC Phase 2.0 with China and strengthened ties with GCC countries and the United States. Tariff negotiations with the US have reduced Pakistan&rsquo;s trade duties, further supporting competitive exports.&nbsp;Reform and continuityThe finance minister outlined ongoing reforms to strengthen fiscal sustainability.&nbsp;These include modernization of the Federal Board of Revenue, pension restructuring, government right-sizing, privatization of select state assets and enhanced debt management, which saved about Rs850 billion last year.&nbsp;&ldquo;We are focused on continuity, credibility, and reform,&rdquo; Aurangzeb said. &ldquo;Our engagement with the IMF is part of a broader strategy to ensure lasting stability, sustainable growth, and increased private-sector investment for Pakistan.&rdquo;&nbsp;The IMF mission will also examine governance reforms, electricity tariff adjustments, and the FY2026-27 federal budget framework. Completion of the review is expected to unlock $1.2 billion in funding, reinforcing Pakistan&rsquo;s recovery and reform momentum.

Federal Minister for Finance Muhammad Aurangzeb speaks with Pakistan TV Digital ahead of the IMF review mission. (Pakistan TV Digital)

Pakistan is well-prepared for IMF reviews this week, Muhammad Aurangzeb said, with $1.2 billion funding pending. Officials report program targets on track, including fiscal, monetary, and governance benchmarks.

Pakistan confident ahead of IMF review, eyes investment-led growth

LAHORE: The Securities and Exchange Commission of Pakistan has said that media reports have &ldquo;inaccurately interpreted&rdquo; the data on the exit of foreign companies from Pakistan, clarifying that 79 new foreign companies were registered, whereas &ldquo;only 19 foreign companies have ceased operations in Pakistan during 2022 to 2025.&rdquo; For months, headlines have painted a grim narrative: that foreign companies were leaving Pakistan, investment was drying up, and confidence in the country&rsquo;s markets was collapsing.&nbsp; However, the reality, according to the country&rsquo;s top corporate regulator, was far more nuanced and optimistic. The SECP stepped in to correct misconceptions, clarifying that the oft-cited numbers in the media were misleading.&nbsp; In a statement issued earlier this week, the regulator said: &ldquo;Only 19 foreign companies have ceased operations in Pakistan during 2022 to 2025, whereas 79 new foreign companies were registered during the same period.&rdquo; The SECP also highlighted a common source of confusion: &ldquo;The figure of 125 ceased foreign companies, cited in some media reports, represents the cumulative total of companies that ceased operations since 1977 to date. This does not reflect the number of companies that exited in the last three years.&rdquo; As of February, 1,157 foreign companies remained registered and operational in Pakistan, a figure that underscored the continued investor confidence in the country&rsquo;s regulatory and business environment. The inflow of foreign capital was not limited to a single sector.&nbsp; In energy, giants such as Saudi Aramco, Wafi Energy, Gunvor Group, Turkish Petroleum, and SOCAR expanded their presence, while UAE-based DP World entered a joint venture with the National Logistics Corporation, reinforcing Pakistan&rsquo;s logistics and supply chain infrastructure. Technology and digital services also saw significant activity.&nbsp; Global firms such as Google, Samsung, IceWarp, and Russoft Synercon were expanding operations, and local companies such as Woot Tech received substantial foreign investment. In a notable deal, Bazaar Technologies acquired Wemsol, and Saudi Arabia&rsquo;s Waqub Data Company took an 80% stake in Woot Tech. The telecommunications sector has been witnessing consolidation, with PTCL acquiring Telenor Pakistan. In the pharmaceuticals sector, Pfizer transferred its Karachi manufacturing plant to Lucky Core Industries to ensure production continuity, and Sanofi sold its majority stake to a local investor consortium, renaming the company Hoechst Pakistan Limited. Agriculture, mining, and even emerging sectors such as electric vehicles also drew attention.&nbsp; Italy&rsquo;s Euricom S.p.A. acquired a 50% stake in Fatima Euricom Rice Mills, while mining and minerals companies, including Barrick Gold, Strategic Metals US, and Nova Minerals US, continued their investment. Electric vehicle companies like BYD, Chery Automobile, and NWTN Motors were also exploring Pakistan&rsquo;s market potential. Foreign investors already in the country are doubling down. The SECP noted: &ldquo;Mashreq Bank has launched and is expanding Pakistan&rsquo;s first digital bank. Kuwait-backed Raqami Digital Bank plans to invest $100 million. Nestl&eacute; is investing an additional $60 million, and the Engro Jazz consortium is committing more than $550 million toward digital infrastructure expansion.&rdquo; The China-Pakistan Economic Corridor (CPEC) Phase II also accelerated industrial cooperation.&nbsp; To date, 24 business-to-business agreements worth $1.5 billion and memoranda of understanding totaling more than $7 billion have been signed, spanning agriculture, renewable energy, information technology, minerals, and industrial relocation. The SECP&rsquo;s data painted a clear picture: Pakistan was not witnessing an exodus of foreign companies.&nbsp; Even in January alone, foreign investors invested in 82 local companies from diverse countries, including China, the US, the UK, Germany, South Korea, Australia, and more. The narrative of panic is misleading. Companies have continued to enter the market, existing investors have continued to expand their commitments, and foreign capital has continued to flow. As the SECP concluded: &ldquo;Foreign investment is continuing, partnerships are expanding, and Pakistan&rsquo;s regulatory environment continues to inspire confidence among international investors.&rdquo; In an environment where fear often dominates headlines, the numbers tell a different story. Pakistan is not just holding steady; it is growing, attracting strategic investments, and positioning itself as an increasingly attractive destination for foreign capital.

For months, headlines have suggested a grim narrative stating that foreign companies were leaving Pakistan, the investment was drying up, and the confidence in the country’s markets was collapsing. 

Pakistan defies panic as foreign investment continues to rise

ISLAMABAD: Pakistan&rsquo;s exports recorded a sharp month-on-month increase in January, rising by nearly 35% compared to December 2025, according to provisional figures released by the Pakistan Bureau of Statistics. The data shows that exports stood at Rs 857 billion ($3.06 billion) in January, up from Rs 635.7 billion ($2.27 billion) in December. This represents an increase of 34.8% in rupee terms and 35.0% in dollar terms. During the same period, imports declined by around 5%, falling to Rs1,622.3 billion ($5.79 billion) from Rs1,707.0 billion ($6.08 billion) in the previous month. As a result of higher exports and lower imports, the trade deficit narrowed to Rs765.2 billion ($2.73 billion), down from Rs1,071.3 billion ($3.81 billion) in December 2025, a 29% contraction. Year-on-year trendOn a year-on-year basis,&nbsp;<a href="https://www.pakistantv.com/article/pakistan-it-exports-surpass-400-million-monthly-for-first-time" target="_blank" style="color: rgb(0, 0, 0);" rel="noopener noreferrer">exports increased</a>&nbsp;by 4.2% in rupee terms and 3.7% in dollar terms, rising to Rs857.0 billion ($3.06 billion) in January 2026 from Rs822.4 billion ($2.95 billion) in January 2025. Imports recorded a marginal decline of 0.8% in rupee terms and 1.4% in dollar terms, easing to Rs1,622.3 billion ($5.79 billion) from Rs1,635.4 billion ($5.87 billion) during the same period. The trade deficit also improved year-on-year, decreasing by 5.9% in rupee terms and 6.6% in dollar terms compared to January 2025. Cumulative performanceHowever, cumulative trade figures for July-January FY2025-26 indicate a decline in overall export performance. Exports during the period fell by 6% in rupee terms and 7.1% in dollar terms, amounting to Rs5,122.5 billion ($18.20 billion), compared to Rs5,447.9 billion ($19.58 billion) in the corresponding period of the&nbsp;<a href="https://www.pakistantv.com/article/pakistan-committed-to-promoting-exports-businessfriendly-environment-federal-minister" target="_blank" style="color: rgb(0, 0, 0);" rel="noopener noreferrer">previous fiscal year</a>. Imports, meanwhile, rose by 10.8% in rupee terms and 9.4% in dollar terms to Rs 11,337.7 billion ($40.23 billion), resulting in a cumulative trade deficit of Rs 6,215.2 billion ($22.04 billion). PBS noted that data from the Directorate of Research and Statistics, Federal Board of Revenue, for January is still awaited, and that the figures are provisional. The bureau also cautioned that minor variations may occur due to rounding.

An aerial view shows stacked containers at the Shanghai Port container terminal in Shanghai on December 8, 2025. (Photo by AFP/File)

The data shows that exports stood at Rs 857 billion ($3.06 billion) in January, up from Rs 635.7 billion ($2.27 billion) in December.

Pakistan's exports surge 35% month-on-month

ISLAMABAD: Global credit rating agency Fitch Ratings on Wednesday reaffirmed Pakistan&rsquo;s long-term foreign-currency credit rating at B-, signaling continued economic stability. <a href="https://www.pakistantv.com/article/fitch-downgrades-frances-credit-rating-in-new-debt-battle-blow" target="_blank" style="color: rgb(0, 0, 0);" rel="noopener noreferrer" class="fr-green">Fitch</a> also assigned Pakistan a Recovery Rating of RR4, indicating average recovery for investors in the event of a default. Previously, Pakistan had been placed in the &ldquo;Under Criteria Observation&rdquo; category, a temporary status used when agencies reassess ratings under revised rules. It has now been removed. Improved financing conditionsThe rating agency had upgraded Pakistan&rsquo;s foreign-currency rating to B- with a stable outlook in April last year, reflecting improved external financing conditions and policy support under the International Monetary Fund program.&nbsp;Fitch warned that Pakistan&rsquo;s rating could come under pressure if fiscal reforms slow, debt levels rise, or external liquidity weakens, particularly due to delays in IMF program reviews.&nbsp;It said the rating could improve if Pakistan achieves sustained reductions in government debt, strengthens tax collection, and builds foreign exchange reserves beyond current forecasts.&nbsp;The decision was seen by market observers as a positive signal, as Pakistan retained its rating after a review under stricter criteria.

Also assigns Pakistan a Recovery Rating of RR4, which indicates an average level of recovery for investors in the event of a default.

Articles tagged with "pakistan economy"