Bulls return to PSX as shares gain over 2,800 points a day after budget

KARACHI: Bulls returned to the Pakistan Stock Exchange (PSX) on Thursday — a day after the government presented budget for FY2024-25.

The KSE-100 index gained 2809 points, or 3.75 per cent to stand at 75,608 at 12:47pm.

Analysts attributed the upward trajectory to the government’s willingness to unlock a deal with the International Monetary Fund (IMF) after the budget.

Analysts expect the budget for the fiscal year to June 2025 to set ambitious fiscal targets as it looks to strengthen the case for a new bailout deal with the International Monetary Fund (IMF).

Pakistan budget 2024-25

Minister for Finance and Revenue Muhammad Aurangzeb Wednesday presented Pakistan’s budget for the fiscal year 2024-25 with a total outlay of Rs18.877 trillion.

Outlining the budget points, Finance Minister Muhammad Aurangzeb said that the gross domestic project (GDP) growth target for the fiscal year 2024-25 is fixed at 3.6pc, whereas the inflation rate is expected to remain 12pc.

He said that the budget deficit to GDP during the period under review is estimated at 6.9pc, whereas the primary surplus during the review period is projected at 1.0pc of the GDP.

The minister said that the Revenue collection of the Federal Board of Revenue is estimated to Rs12,970 billion during up-coming fiscal year, adding that tax revenue collection during the current fiscal year grew by 38 percent and the provincial share would be Rs7,438 billion.

He said that the non-tax revenue targets of the federation are fixed at Rs3,587 billion, whereas the net income of the federal government would be Rs9,119 billion.

The total expenditures of the federal government is estimated at Rs18,877 billion out of the total amount of Rs9,775 billion would be spent on interest payments.

MAJOR POINTS AND ANNOUNCEMENTS

• GDP growth target set at 3.6pc
• Inflation rate projected at 12pc
• Development budget set at Rs1500bn
• 18pc sales tax on smartphones
• Reforms to control pension expenditure
• 101pc increase in development budget
• Development projects for Azad Kashmir, merged districts
• 17 major development projects
• 25pc increase in salaries for BPS1-16
• 20pc increase in salaries for BPS17-22
• 15pc increase in pensions for retired employees
• Minimum monthly wage increased from Rs32,000 to Rs37,000
• Privatisation top priority
• Sales tax to be applied to various goods, services
• 5pc FED proposed on new plots, residential commercial property
• Establishment of Danish schools in AJK, GB, Balochistan and Islamabad
• Penalty for selling smuggled cigarettes

MAJOR ALLOCATIONS IN BUDGET 2023-24

• Rs597 billion allocated for BISP
• SME credit to be increased to Rs1100bn
• Rs79bn allocated for IT sector
• Rs267bn allocated for energy sector
• Rs206bn allocated for water resources
• Rs7bn allocated for FBR reforms, digitalisation
• Rs86.9bn allocated for promotion of remittances
• Rs1,400 allocated for PSDP
• Rs2,122bn to be provided for defence
• Rs839bn for civil administration