2024 was a year of both highs and lows for Pakistan economy. From securing an IMF loan to significant changes in the stock market, there were many shifts. Let’s break down the year’s major events and trends in simple terms to understand how they impacted the nation.
IMF Loan Secured A Mix of Tax Hikes and Subsidy Cuts
In 2024, Pakistan successfully secured a $7 billion loan from the International Monetary Fund (IMF). However, it wasn’t easy. The government had to raise taxes and remove subsidies to get the deal. This resulted in higher costs for the general public, but it was necessary to stabilize the country’s finances. The Prime Minister expressed hope that this would be the last time Pakistan would have to depend on such loans, but the reality remains uncertain.
Stock Market Surge A Year of Bulls
The Pakistan Stock Exchange (PSX) saw a significant rise in 2024. The KSE-100 Index gained 75% from January to December 20, 2024. This was a year of “bulls” in the market, with the index crossing 116,000 points for the first time. However, there was also a major drop of 4,800 points in a single day, showing the volatility of the market. Despite the ups and downs, the overall performance was impressive.
| KSE-100 Index Performance 2024 | Start of Year | End of Year (Dec 20) | Gain |
|---|---|---|---|
| Index Value | 66,400 | 116,000 | 75% |
| Biggest Single-Day Drop | 4,800 points |
Internet Disruptions A Growing Issue
In 2024, the government imposed widespread internet disruptions, affecting daily life and businesses. These disruptions, once limited to special days like elections, became more frequent. The Pakistan Software Houses Association estimated that these interruptions could cost the economy up to $300 million. This was particularly absurd considering the country’s push towards digital transformation and its goal to reach $25 billion in IT exports. The disruptions severely impacted freelancers and businesses relying on stable internet access.
| Impact of Internet Disruptions | Estimated Cost | Affected Sector |
|---|---|---|
| Disruptions in 2024 | $300 million | IT, Freelancers, Digital Economy |
Fiscal Surplus A Rare Achievement
Pakistan recorded a fiscal surplus for the first time in 24 years in 2024. This was largely due to record profits by the State Bank, which benefitted from high-interest rates and petroleum revenue. The central bank posted a surplus profit of Rs2.5 trillion, a result of the 22% monetary policy rate and the Rs262 billion collected from petroleum levies. This was a positive sign for the country’s fiscal health.
| Fiscal Surplus Details | Amount |
|---|---|
| State Bank Profit | Rs2.5 trillion |
| Petroleum Levy Revenue | Rs262 billion |
Remittances A Steady Support
Pakistan saw a surplus of $729 million in November, the highest in the last decade. A key factor behind this surplus was the rise in remittances, which reached nearly $3 billion. The government’s crackdown on illegal money transfer methods like hawala/hundi helped increase the formal remittances flowing into the country.
| Remittances in November 2024 | Amount |
|---|---|
| Remittances | $3 billion |
Gold Prices A Safe Haven Investment
Gold prices hit an all-time high of Rs277,000 per tola in October 2024. This surge was due to global uncertainties, with many investors flocking to gold as a safe investment. Although the price has since dropped, the global trend of central banks buying gold continued, reflecting the demand for this precious metal.
| Gold Prices 2024 | Highest Price (Oct) | Current Price |
|---|---|---|
| Gold per tola | Rs277,000 | Dropped after peak |
Interest Rate Changes A Favorable Base Effect
The year began with a high-interest rate of 22%, but by the end of 2024, it had dropped to 13%. The Monetary Policy Committee predicted that inflation would decrease significantly in the second half of 2024, and they were right. Inflation fell to 4.9% in November, marking a 78-month low. While it didn’t feel like it on the ground, this was a positive development for the economy.
| Interest Rate & Inflation | Start of 2024 | End of 2024 |
|---|---|---|
| Interest Rate | 22% | 13% |
| Inflation | High | 4.9% |
IPO A Record Number in 2024
In 2024, the PSX saw an increase in initial public offerings (IPOs). Seven IPOs took place, raising Rs8.4 billion, the highest since 2021. This was a positive sign for the capital markets, showing that there was investor interest despite economic challenges.
| IPOs in 2024 | Number of IPOs | Amount Raised |
|---|---|---|
| Total IPOs | 7 | Rs8.4 billion |
Rice Exports A Boost from India Ban
Pakistan’s rice exports reached a record $4 billion in FY24. This surge was partly due to India’s ban on rice exports, which allowed Pakistan to fill the gap in international markets. The favorable weather conditions in Pakistan also helped boost production. Despite India lifting the ban, Pakistan rice exports remained strong.
| Rice Exports 2024 | Amount |
|---|---|
| Total Exports | $4 billion |
A Year of Contradictions and Surprises
2024 was a year of contradictions for Pakistan. While the country managed to secure important financial support from the IMF and posted impressive gains in certain sectors, it also faced significant challenges. The stock market rose, but internet disruptions caused havoc for businesses. The fiscal surplus was a positive achievement, but high taxes and subsidy cuts took a toll on the public. Despite these contradictions, the year ended with mixed results, setting the stage for what will be a challenging yet potentially rewarding 2025.
