Category: Featured

Industry groups seek deeper interest rate cuts after SBP decision

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KARACHI: Despite the State Bank of Pakistan (SBP) cutting the policy rate by 50 basis points, contrary to market expectations, the business community has expressed widespread disappointment over the central bank’s decision to reduce the rate modestly from 11% to 10.5%. Industry leaders have termed the modest reduction insufficient to provide meaningful relief to businesses struggling under high production costs, rising energy tariffs and a challenging economic environment. President of the Karachi Chamber of Commerce & Industry (KCCI), Muhammad Rehan Hanif, described the move as “far below what is urgently…

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PSX at peak ahead of policy decision

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KARACHI: The Pakistan Stock Exchange (PSX) opened the week on Monday with renewed optimism and rose to a record high above 170k, reflecting the extension of bullish momentum from the previous week. Investors remained somewhat upbeat ahead of the monetary policy announcement later in the day, when the central bank unexpectedly cut its policy rate by 50 basis points. The rally was largely driven by buying interest in energy stocks, alongside expectations of a reduction in the policy rate. The session saw wild swings as the KSE-100 index traded between…

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Monetary policy eased as SBP lowers policy rate to 10.5pc

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KARACHI: The State Bank of Pakistan (SBP) on Monday reduced the policy rate by 50 basis points to support sustainable economic growth, delivering a surprise to markets and marking a move that diverged from the International Monetary Fund’s (IMF) more cautious stance, which had emphasised maintaining the policy rate. Announcing its decision after the Monetary Policy Committee (MPC) meeting, the central bank said headline inflation had remained within the target range of 5-7% during July-November FY26, creating limited space for calibrated monetary easing. The MPC, however, acknowledged that core inflation…

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Diesel price slashed by Rs14 per litre

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ISLAMABAD: The government on Monday reduced the price of diesel by Rs14 per litre in line with fluctuation in global oil prices, effective from December 16. However, the government has maintained the existing prices of petrol. After the recent reduction, the diesel will be sold at Rs265.65 per litre against the old price of Rs279.65 per litre, recording a cut of Rs14 per litre. However, the price of petrol has been maintained at Rs263.45 per litre. High-speed diesel is widely used in the transport and agriculture sectors; as a result,…

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Centre forms eight NFC committees among provincial tensions

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ISLAMABAD: The Centre has notified eight committees of the National Finance Commission (NFC), including one on debt utilisation and the transfer of expenditures to provinces, following the attorney general’s support for the federal government against Sindh’s objections. The development came as Pakistan’s top fiscal expert, Dr Hafiz Pasha, noted that despite the constitutional requirement to allocate 57.5% of the divisible pool to provinces, they received only 45.8% in the last fiscal year after accounting for petroleum levies and cash surpluses. Dr Pasha made these remarks at a seminar on the…

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SC rules burden of proof lies with employer in termination disputes

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ISLAMABAD: The Supreme Court has ruled that the primary burden rests on the employer to prove the misconduct of an employee in a dismissal case. “The primary burden rests on the employer to prove the misconduct so that the matter may be decided on the preponderance of evidence which is clear, credible, and lends support to the final conclusion with little room for doubt. “By and large, when any employee challenges his termination or dismissal from service, the burden often shifts upon the employer to establish that the action was…

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Beyond palm oil, Pak-Indonesia trade entering a new phase

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ISLAMABAD: Pakistan and Indonesia are steadily shaping one of South and Southeast Asia’s most consequential, yet under-reported, economic relationships. What began as a tariff-centred arrangement has matured into a broader commercial partnership driven by commodity flows, rising business-to-business engagement, and an expanding agenda for investment cooperation. Recent figures underline this momentum. Bilateral trade reached $4.2 billion in 2024, and early 2025 numbers continue to climb. Between January and September 2025, trade volumes touched $2.92 billion, up from $2.69 billion during the same period of last year. This steady rise reflects…

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The myth of stability and Pakistan’s economic underperformance

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ISLAMABAD: A “generally” held opinion is that Pakistan’s economy has performed better in military-led governments and that democracy has held back our economic potential. The last such episode under General Musharraf (1999-2007) saw a high growth rate, better-managed fiscal policy and a high level of investment. Based on a rather superficial analysis of these facts, it is believed that sustained economic growth requires political stability, which is not possible under a democratic dispensation where politics trumps economics. About the military rule and economic growth, we now understand that Pakistan’s foreign…

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The reason state enterprises keep bleeding trillions

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KARACHI: Pakistan’s state-owned enterprises (SOEs) have suffered a staggering cumulative loss of Rs5.9 trillion since 2014. There are multiple reasons for this. Among them, for example, are chronic operational inefficiencies such as poor cost controls, outdated systems and weak financial discipline. This, in turn, leads to corruption. Employees in key positions use their privilege to get kickbacks in procurement and the award of contracts. Weak financial controls mean that such corruption often goes undetected. And if it is detected, the perpetrators fear no reprisals, due to the incompetence and often…

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