PSX Slumps as IMF Delay and Trade Deficit Shake Investor Confidence
The Pakistan Stock Exchange (PSX) continued to lose ground on Monday. Investors reacted sharply to the delay in IMF talks and a widening trade deficit. Fiscal challenges and missed tax targets deepened selling pressure.
The KSE-100 Index fell by 1,110 points, closing at 161,988. It touched an intraday low of 158,704 points before rebounding slightly. The drop reflected cautious investor sentiment across all sectors.
Market expert Ahfaz Mustafa, CEO of Ismail Iqbal Securities, said the market reacted to IMF uncertainty, FBR revenue shortages, and the rising trade gap. He added that the upcoming result season could bring some relief.
IMF Talks Stall
The IMF review mission ended without a staff-level agreement. Talks on external financing and the Governance and Corruption Diagnostic report remain unresolved. Officials expect progress next week, but investors remain skeptical.
The Federal Board of Revenue (FBR) missed its FY25 collection target by Rs1.2 trillion. Despite new taxes worth Rs1.3 trillion, the shortfall continues. For the first quarter of FY26, the FBR fell short by Rs190 billion. The IMF now projects a possible Rs400 billion gap for the fiscal year.
Economic analyst AAH Soomro said the correction is natural. Investors are adjusting to political uncertainty and regional tensions, he added.
Trade Gap Widens
Pakistan’s trade deficit widened by 46% year-on-year in September 2025 to $3.34 billion. Imports surged 14%, while exports dropped 11.7%. As a result, the July–September trade gap rose to $9.37 billion, increasing pressure on reserves.
However, some indicators showed resilience. The National Accounts Committee revised FY25 GDP growth to 3.04%. Remittances grew 11% in September to $3.2 billion, bringing the quarterly total to $9.5 billion.
The rupee gained slightly to Rs281.17 per US dollar, while the State Bank’s reserves rose to $14.4 billion. Despite these improvements, investor confidence remained fragile.
