Key points:
- KSE-100 index hits record high, surpasses 125,000 mark.
- IMF-backed reforms boost investor sentiment and market confidence.
- IT exports projected to exceed $3 billion.
- Moody’s, Fitch, JP Morgan predict 30–40 per cent FDI surge.
ISLAMABAD: With the Special Investment Facilitation Council (SIFC) actively operating, geopolitical assertiveness boosting investor confidence, and a record development budget in place, the government aims to attract $5 billion in foreign direct investment (FDI).
Promising growth in remittances, and capital market welcoming the budget — with the KSE-100 index touching a historic in intra-day high — reveal growing investor confidence in Pakistan. It is also evident from the fact that the latest bull-run on the market was led by foreign investors.
Amid rising investor sentiment and rebound in economic confidence, Pakistan’s investment-led development strategy for FY2025–26 — anchored by a record Rs 4.2 trillion development outlay — aims to attract sizeable investments. That also seems achievable given the International Monetary Fund’s acknowledged reforms and SIFC’s active role in removing red tape and bureaucratic inertia.
In addition to its performance in facilitating local as well as foreign investors, the SIFC’s credibility has been enhanced by the promotion of its co-chair, Chief of Army Staff, Syed Asim Munir, as Field Marshal.
The post-budget signals have already rippled through financial markets. The KSE-100 Index surged past ‘125,000’ mark, setting a historic high, driven by investor optimism over policy continuity, improving regional dynamics, and credible reform commitments.
This record-breaking momentum shows that Pakistan’s economic narrative is turning a corner, said Ali Malik, market strategist at a Securities advisory company.
The Planning Commission confirmed the breakdown of the Rs 4.2 trillion development envelope, with Rs 1.4 trillion earmarked under the Public Sector Development Programme (PSDP) and Rs 2.8 trillion mobilised through non-PSDP channels, including public-private partnerships and foreign-funded initiatives.
Balochistan takes centre stage
In a post-budget press conference on Thursday, Federal Minister for Planning Minister Ahsan Iqbal unequivocally stated that Balochistan’s development tops the national agenda. Key allocations are being directed towards water infrastructure, solarisation of remote districts, higher education expansion, and the completion of delayed China-Pakistan Economic Corridor (CPEC) Phase-II projects in Gwadar and the Makran belt.
Separately, the Balochistan government announced the launch of a dedicated Climate Change Fund to address environmental vulnerabilities and support sustainable development in coordination with federal priorities.
No region will be left behind. Balochistan’s uplift is a national priority, Iqbal said.
SIFC spurs investment boom
The federal government’s SIFC platform, designed to streamline investment approvals and enhance inter-agency coordination, has already unlocked over $5 billion in active and pipeline investment, with key interest from Middle Eastern and East Asian economies.
According to a recent Reuters brief, Pakistan’s newfound regional assertiveness — bolstered by military stability and political coordination — has contributed to a more confident investor outlook.
Pakistan’s regional clarity and its institutional approach to investment are seen as green shoots of recovery” Reuters noted.
Revitalising manufacturing base
Speaking to reporters, Pakistan’s Federal Minister for Finance Muhammad Aurangzeb emphasised that the new budget aims to revive Pakistan’s industrial base, with targeted incentives for export-led sectors like textiles, Information Technology (IT), and food processing.
We’re determined to shift the economy from consumption-led to production-led growth, said Aurangzeb, who also confirmed a Rs 50 billion Industrial Revival Fund.
The budget includes allocations for green mobility, agri-modernisation, and digital exports, with IT export projections expected to exceed $3 billion, supported by new tax incentives and streamlined capital repatriation.
FDI boost anticipated
Analysts at Moody’s, Fitch, and JP Morgan project that Pakistan could see a 30–40 per cent surge in foreign direct investment over the next 12 months — provided it maintains fiscal discipline and policy continuity.
“The budget sets the stage for private capital to take the lead,” said banker Mohsin Nathani, chief executive officer of a private commercial bank.
Strategic economic reset
While macroeconomic challenges remain, Pakistan appears to be entering a phase of strategic economic reset, pivoting from emergency stabilisation to structured growth.
With record development spending, rising investor confidence, and Balochistan’s long-overdue uplift finally placed front and centre, the country is betting on reform, investment, and regional stability to chart a new economic course.
