The Pakistan Stock Exchange (PSX) witnessed a notable surge on Friday, with the benchmark KSE-100 index climbing by more than 1 percent in early trading. The index gained 1,932 points, reaching 167,449, continuing the upward momentum observed throughout the week.
This positive market movement was largely driven by improved investor sentiment following a ceasefire agreement in the Middle East, which helped ease geopolitical tensions and buoy regional markets, including Pakistan’s.
Across Asia, stock markets also experienced gains. Benchmark indices in Japan, South Korea, and Indonesia rose approximately 2 percent, while markets in India and Vietnam increased by about 1 percent. Meanwhile, equities in Shanghai and Hong Kong showed modest improvements.
In a significant development, the Asian Development Bank (ADB) highlighted gradual improvement in Pakistan’s economy but cautioned that risks persist. The ADB projected economic growth of 3.5 percent for the current fiscal year, with an acceleration to 4.5 percent expected next year.
However, the bank warned that any resurgence of conflict in the Middle East could exacerbate inflationary pressures and undermine economic stability. Inflation is forecasted to average 6.4 percent in fiscal year 2026 and rise slightly to 6.5 percent in fiscal year 2027.
The ADB identified rising oil and gas prices as a significant threat to the economic outlook and emphasized the importance of ongoing structural reforms to mitigate external shocks. It also noted that increased private sector investment would bolster growth, with anticipated improvements in the construction and industrial sectors.
Additionally, the report mentioned the possibility of a cautious easing of monetary policy by Pakistan’s central bank as part of the economic strategy moving forward.
