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Pakistan’s economy achieved stability following the agreement with the International Monetary Fund (IMF), according to S&P.COM

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Regarding Pakistan, S&P Global Ratings has maintained its “CCC+” long-term sovereign credit rating and “C” short-term rating. Regarding the long-term rating, the prognosis is unchanged.

Pakistan would be able to pay its debts more easily because of the IMF agreement, which is predicted to increase foreign exchange reserves. Rollovers are still necessary for Pakistan to keep up its foreign debt, nevertheless.

Pakistan’s economy will continue to be under pressure from debt obligations, even in the face of stability. The economy may also be impacted by monetary policy, inflation, and uncertain circumstances.

On the other hand, the default risk has decreased due to the growth in foreign exchange reserves. Controlling current account deficits and foreign exchange flows is crucial for preserving economic stability.

To sustain Pakistan’s economic stability, the report stated that funds from the IMF, Saudi Arabia, the United Arab Emirates, and China must be rolled over on schedule.

Positively, Fitch Ratings raised Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from “CCC” to “CCC+” on July 29.

The Fitch Company stated in a statement on Monday that “the upgrade reflects greater certainty over the continued availability of external funding, in the context of Pakistan’s staff-level agreement (SLA) with the IMF on a new 37-month USD7 billion Extended Fund Facility (EFF).”

It issued a warning, saying, “Nevertheless, Pakistan’s significant funding needs leave it vulnerable if it fails to implement tough reforms, which could undermine program performance and funding.”

Given the substantial policy changes in the most recent budget for the fiscal year ending in June 2025 (FY25) and the solid track record of support, we think this will be possible.

According to Fitch, Pakistan’s nine-month standby arrangement with the global lender was effectively concluded in April for the last IMF program.

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In interbank trade, the Pakistani rupee beats the US dollar.

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In the international exchange market, the US dollar has continued to weaken in relation to the Pakistani rupee.

The dollar fell to Rs278.10 from Rs278.17 at the beginning of interbank trading, according to currency dealers, a seven paisa loss.

In the meantime, there was a lot of turbulence in the stock market, but it recovered and moved into the positive zone. The KSE-100 index recovered momentum and reached 116,000 points after soaring 1,300 points.

Both currency and stock market swings, according to analysts, are a reflection of ongoing market adjustments and economic uncertainty.

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Phase II of CPEC: China-Pakistan Partnership Enters a New Era

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The cornerstone of economic cooperation between the two brothers and all-weather friends is still the China-Pakistan Economic Corridor, the initiative’s flagship project.

In contrast to reports of a slowdown, recent events indicate a renewed vigour and strategic emphasis on pushing the second phase of CPEC, known as CPEC Phase-2, according to the Ministry of Planning, Development, and Special Initiatives.

According to the statement, this crucial stage seeks to reshape the foundation of bilateral ties via increased cooperation, cutting-edge technology transfer, and revolutionary socioeconomic initiatives.

Planning Minister Ahsan Iqbal is leading Pakistan’s participation in a number of high-profile gatherings in China, such as the 3rd Forum on China-Indian Ocean Region Development Cooperation in Kunming and the High-Level Seminar on CPEC-2 in Beijing.

His involvement demonstrates Pakistan’s commitment to reviving CPEC, resolving outstanding concerns, and developing a strong phase-2 roadmap that considers both countries’ long-term prosperity.

At the core of these interactions is China’s steadfast determination to turn CPEC into a strategic alliance that promotes development, progress, and connectivity.

Instead of being marginalised, CPEC is developing into a multifaceted framework with five main thematic corridors: the Opening-Up/Regional Connectivity Corridor, the Innovation Corridor, the Green Corridor, the Growth Corridor, and the Livelihood-Enhancing Corridor.

With the help of projects like these, the two countries will fortify their partnership, and CPEC phase-2 will become a model of global economic integration and collaboration that benefits not just China and Pakistan but the entire region.

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The inflation rate in Pakistan dropped to its lowest level.

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On December 2, core inflation as determined by the Consumer Price Index (CPI) significantly slowed, falling to 4.9% in November 2024 from 7.2 percent in October 2024.

The CPI-based inflation rate for the same month last year (November 2023) was 29.2%, according to PBS data.

Compared to a 1.2% gain in the prior month, it increased by 0.5% month over month in November 2024.

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