Page 75 - CMA Journal (Sep-Oct 2025)

O THER F EATURES

Economy News

SBP Holds Policy Rate at 11% average interest rate, while external debt was Rs. 25.2
trillion at 4.4%. High reliance on domestic financing
The State Bank of Pakistan kept the policy rate pushed interest payments to nearly 6% of GDP. The
unchanged at 11% in October 2025, marking the fourth Medium-Term Debt Management Strategy highlighted
consecutive pause since the 1 percentage point cut in reduced refinancing risk, with domestic debt maturity
May. The MPC cited rising inflation, post-flood economic extended from 2.7 to 3.8 years, raising overall debt
recovery, and steady GDP growth as key considerations. maturity to 4.5 years.
Strong foreign exchange reserves, improving industrial
activity, and resilient private-sector credit support the Power Sector Circular Debt Hits
outlook, while inflation risks from global commodity Rs. 1.69 Trillion in Q1 FY2025-26
prices and food supply pressures persist. The committee
judged the real policy rate to be adequate for guiding Pakistan’s power sector circular debt increased by Rs. 79
inflation toward the medium-term target. billion to Rs. 1.693 trillion in the first quarter
(July–September) of FY2025-26, slightly higher than the
Pakistan’s GDP Grows 3.04% to Rs. 73 billion rise in the same period last year. Payables to
$407 Billion in FY2025 power producers rose to Rs. 944 billion, while GENCOs’
payables to fuel suppliers declined to Rs. 90 billion.
Pakistan’s economy grew by 3.04% in FY2025, up from an DISCOs inefficiencies fell by Rs. 67 billion compared to
earlier estimate of 2.68%, according to the National last year, reflecting improved operational performance.
Accounts Committee. Quarterly growth reached 5.66% in The Power Division attributed the increase to seasonal
Q4, driven by strong industrial expansion, while revised and operational factors and noted that these
growth for the first three quarters ranged from 1.80% to fluctuations have no impact on consumer tariffs.
2.79%. The country’s economic size now stands at $407.2
billion, with per capita income rising to $1,812, reflecting Inflation Climbs to 6.2% in October
improvements across agriculture, industry, and services.
due to recent floods
Pakistan Unveils National Tariff Pakistan’s inflation rate rose to 6% in October 2025, up
Policy 2025–30 from 5.6% in September, exceeding the government’s
projected range of 5 to 6 percent, driven by recent floods
Pakistan launched the National Tariff Policy (NTP) and supply pressures. Urban CPI stood at 6 percent, while
2025–30, aiming to cut the simple average tariff to 9.7% rural inflation reached 6.6 percent. Prices of food and
and the trade-weighted average below 6% by 2029–30 non-alcoholic beverages increased by 5.56 percent,
through the removal of Additional Customs Duties, health and education by 9.69 percent and 10.61 percent
Regulatory Duties, and the 5th Schedule. The policy respectively, and utilities by 4.24 percent. The Finance
seeks to restore export competitiveness, attract Ministry reaffirmed its commitment to fiscal discipline
investment, and integrate Pakistan into Global Value and targeted social protection to keep inflation under
Chains, following concerns over a widening trade deficit. control.
Officials highlight that past tariff reforms between
FY2002 and FY2008 drove the country’s strongest export Petrol and Diesel Prices Hike for
growth of 13% annually.
November 1 to 15
Pakistan’s Debt Surges to Rs. 78.7 For the fortnight of November 1 to 15, petrol price was
Trillion, Exceeds FRDL Limit raised by Rs. 2.43 per litre to Rs. 265.45 and high-speed
diesel (HSD) by Rs. 3.02 to Rs. 278.44, following OGRA and
Pakistan’s public debt rose by Rs. 7.45 trillion in ministry recommendations. Kerosene and light diesel oil
FY2024-25 to Rs. 78.7 trillion ($277.6 billion), or 68.6% of also increased, reflecting global oil market fluctuations,
GDP, surpassing the 60% ceiling set by the FRDL Act. with higher HSD costs expected to impact transport and
Domestic debt stood at Rs. 53.5 trillion with a 15.8% food prices.

ICMA’s Chartered Management Accountant, Sep-Oct 2025 73