ISLAMABAD: Pakistani stocks increased by 4 percent on a month-on-month basis on the back of a successful staff level agreement with the International Monetary Fund, among other factors, top brokerage house Topline Securities said in a monthly market review on Friday.

On Tuesday, IMF staff reached a deal with Pakistan for a new $1.3 billion arrangement and also agreed on the first review of the ongoing 37-month bailout program. Pending board approval, Pakistan can unlock the $1.3 billion under a new climate resilience loan program spanning 28 months. The IMF will also free $1 billion for the South Asian nation under its $7 billion bailout program, which would bring those disbursements to $2 billion.

The program, secured mid-year in 2024, has played a key role in stabilizing Pakistan’s economy and the government has said the country is on course for a long-term recovery.

“KSE 100 Index increased by 4 percent on MoM basis, this gain can be attributed to staff level agreement with IMF, circular debt resolution plan where news flow suggest that significant progress has been made and noise that government is working on plan to reduce the electricity prices,” Topline Securities said in its review. 

Plugging unresolved debt across the power sector is a top priority under the ongoing IMF bailout, which has helped Pakistan dig its way out of an economic crisis.

Pakistan’s government, the largest shareholder or owner of most power companies, faces a challenge in resolving debt due to fiscal constraints. To address this, Islamabad has raised energy prices, as recommended by the IMF, but still needs to settle the accumulated debt.

The government plans to reduce “circular debt” — public liabilities that build up in the power sector due to subsidies and unpaid bills — this year by eliminating government-guaranteed debt and moving to a revenue-based system.

This approach is expected to lower financing costs, enabling the government to pay off interest and service debt obligations, the power ministry said earlier this month. 

Other major developments during this month have been the inflation rate for February coming in at 1.5 percent, the lowest reading in nearly a decade. The monetary policy committee also kept the policy rate unchanged at 12 percent, while the remittance figure for the month of February 2025 clocked in at S$3.1 billion, up 39 percent YoY and 4 percent MoM.

Pakistan’s inflation is likely to remain steady in March, in the 1 percent to 1.5 percent range, the country’s finance ministry said in its monthly economic outlook, after slowing to its lowest level in almost a decade the previous month. 

Inflation in Pakistan has been declining for several months after it soared to around 40 percent in May 2023.

Pakistan says its $350 billion economy has stabilized under the $7 billion IMF bailout that had helped it stave off a default threat.

“While economic growth remains moderate, inflation has declined to its lowest level since 2015, financial conditions have improved, sovereign spreads have narrowed significantly, and external balances are stronger,” the IMF said about Pakistan. 

Islamabad had been awaiting the IMF agreement on the first review of the bailout and disbursement of $1 billion ahead of the country’s annual budget, usually presented in June.

The IMF statement also noted what it called elevated downside risks such as geopolitical shocks to commodity prices, tightening global financial conditions, or rising protectionism.

It said such risks could undermine Pakistan’s “hard-won macroeconomic stability.”

ISLAMABAD: Prime Minister Shehbaz Sharif this week said Chinese multinational technology company Huawei’s program to train 300,000 Pakistanis will generate employment in the country and boost its exports, state-run media reported. 

Pakistan and Huawei last year signed an agreement to train 300,000 Pakistani youths in information and communication technology (ICT) skills to match international standards. Huawei is providing training to Pakistani youth in artificial intelligence (AI), cybersecurity, cloud computing and other advanced technologies under the initiative.

The Pakistani prime minister met a five-member delegation of the company, headed by its Chief Executive Officer Ethen Sun on Thursday, state broadcaster Radio Pakistan reported. 

“Shehbaz Sharif said the government seeks a solid and long-term partnership with Huawei,” it said. “He highlighted that Huawei’s ICT training program will not only boost IT exports but will also help create employment opportunities for youth.”

Sharif’s office said earlier this month that Huawei has trained over 20,000 Pakistanis under the program. He was briefed by the delegation that 240,000 youths will receive basic training while 60,000 will undergo high-tech training under the initiative.

“The training is expected to be completed by the end of this year,” Radio Pakistan said. 

The state media said Huawei has additionally, in collaboration with the Higher Education Commission, introduced courses in AI, cloud computing, big data and cybersecurity in 15 Pakistani universities.

Pakistan views ICT as a driver of economic change and seeks to transform the sector into a cornerstone of its strategy for financial stability, courting foreign investment from countries like China and the Gulf states.

In its bid to generate more jobs countrywide, Sharif launched the Digital Youth Hub portal in Islamabad on Thursday. 

The initiative will connect young people to jobs, educational opportunities and enhance skills development in the country. 

Sharif’s government has repeatedly spoken of putting Pakistan on the track to economic recovery by increasing its exports. In its economic transformation plan issued this year, the government says it hopes to achieve $60 billion in exports in the next five years.