Pakistan’s stock market has been on an unprecedented rise in recent months, with the KSE-100 Index crossing the historic 100,000-point mark on October 28, 2024. This “golden day” in the history of the Pakistan Stock Exchange (PSX) has sparked debate, with the government attributing the surge to effective economic policies, while critics label it as temporary and artificial.
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Globally, stock markets serve as a key indicator of a country’s economic health. Despite rumors of economic instability and default, PSX has defied expectations, rising from 40,000 to 100,000 points in just 17 months, with investor profits increasing by a staggering 150%.
Factors Driving the Stock Market Boom
Economic analysts credit several factors for this remarkable performance:
- Inflation Control: Lower inflation rates have led to a decrease in interest rates, encouraging investments in the stock market.
- Currency Stability: The Pakistani rupee’s stabilization has restored investor confidence.
- Improved Economic Policies: Better tax collection, reduced trade deficits, and increased exports have contributed significantly.
- IMF Program: Pakistan’s return to the IMF program has boosted foreign investor trust.
Additionally, local and foreign investors now believe that despite political instability, major regime changes are unlikely, ensuring continuity of governance.
Why the Common Man Remains Unaffected
Despite record-breaking growth, the benefits of the stock market are limited to a small segment of the population. Less than 1% of Pakistan’s population invests in the PSX, meaning the profits primarily benefit a select few investors and families.
Economic experts suggest that true progress will only occur with a focus on broader economic reforms, including:
- Creating employment opportunities
- Reducing poverty
- Encouraging small and medium enterprises (SMEs)
Only through these measures can the economic growth reflected in the stock market translate into improved living standards for the majority.
