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The State Bank of Pakistan (SBP) has announced a 50 basis points (bps) cut in the policy rate, effective December 16, 2025, marking the first change in interest rates after a prolonged pause of seven months. The decision was taken during the Monetary Policy Committee (MPC) meeting held on December 15, 2025, as outlined in the latest Monetary Policy Statement. The policy rate had remained unchanged at 11 percent since May 2025, when the central bank last reduced it from 12 percent to 11 percent. With the latest decision, the SBP aims to strike a balance between maintaining price stability and supporting sustainable economic growth. Read More: https://theboardroompk.com/sbp-expected-to-maintain-11-policy-rate-amid-inflation-caution/ Why the State Bank of Pakistan Cut the Policy Rate According to the MPC, inflation during July–November FY26 averaged within the SBP’s medium-term target range of 5–7 percent, providing room for cautious monetary easing. While core inflation remains relatively sticky, the overall inflation outlook is broadly unchanged due to:• Benign global commodity prices• Anchored inflation expectations• A prudent monetary policy stance The MPC noted that economic activity is gaining traction, supported by strong improvement in high-frequency indicators, including a better-than-expected recovery in large-scale manufacturing (LSM) during the first quarter of FY26. Despite these positive indicators, the Committee highlighted that the global economic environment remains challenging, particularly for exports, which could pose risks to Pakistan’s macroeconomic outlook. Against this backdrop, the MPC concluded that there was sufficient space to modestly reduce the policy rate while safeguarding price stability. Economic Developments Since the Last MPC Meeting The Monetary Policy Committee reviewed several key domestic and external developments that influenced its decision: Labor Market TrendsThe Labor Force Survey 2024–25 indicates an increase in the unemployment rate compared to 2020–21, despite faster employment growth. This reflects structural challenges in the labor market and underscores the need for sustained economic expansion to generate jobs. Foreign Exchange Reserves and IMF SupportDespite ongoing external debt repayments, SBP’s foreign exchange reserves increased to over $15.8 billion, supported by a $1.2 billion inflow from the IMF following the successful completion of EFF and RSF reviews. The reserves level has already surpassed the December 2025 target of $15.5 billion. Business and Consumer ConfidenceLatest SBP-IBA surveys show an improvement in consumer confidence, while business confidence, though still positive, has moderated slightly amid global uncertainties. Fiscal PerformancePakistan recorded overall and primary fiscal surpluses in Q1-FY26, largely due to a sizeable profit transfer from the SBP. However, slower tax collection growth raises concerns about meeting full-year fiscal targets. Real Sector Performance: Industrial and Agricultural Outlook Industrial Growth Gains MomentumThe real sector continues to demonstrate robust momentum. Large-scale manufacturing (LSM) posted 4.1 percent year-on-year growth in Q1-FY26, with most industrial sectors showing increased output. Additional indicators such as:• Automobile sales• Fertilizer and cement demand• Imports of machinery and intermediate goodsall point to a positive outlook for industrial activity. Agriculture Sector OutlookIncoming data on major crops, particularly wheat, suggests favorable production prospects. Improved input conditions and government-backed incentive schemes indicate that wheat output may exceed targets, providing support to food security and rural incomes.Collectively, these developments are expected to support the services sector, with real GDP growth for FY26 projected in the upper half of the 3.25–4.25 percent range. External Sector: Current Account and Trade Challenges The current account deficit stood at $0.7 billion during July–October FY26, aligning with MPC expectations. While imports grew alongside economic recovery and workers’ remittances remained resilient, exports faced pressure due to a sharp decline in food exports, particularly rice. Looking ahead:• Global trade dynamics and tariff-related developments may constrain exports• Lower global oil prices could help contain import growth Overall, the current account deficit is projected to remain within 0–1 percent of GDP in FY26, while SBP’s foreign exchange reserves are expected to rise to $17.8 billion by June 2026, assuming planned inflows materialize. Fiscal Sector: Progress and Structural Challenges Although fiscal balances showed improvement in Q1-FY26, FBR tax collection growth slowed to 10.2 percent year-on-year during July–November FY26, requiring significant acceleration to meet budget targets. Lower-than-budgeted interest payments may help contain the fiscal deficit, but achieving the targeted primary surplus remains challenging. The MPC reiterated the importance of:• Broadening the tax base• Privatizing loss-making state-owned enterprises (SOEs)• Implementing long-overdue structural reforms to strengthen fiscal buffers and create space for public investment. Money, Credit, and Inflation Trends Credit Expansion Broad money (M2) growth accelerated to 14.9 percent by late November, driven largely by increased government borrowing. Private sector credit expanded by Rs187 billion during July–November, with strong demand from textiles, wholesale and retail trade, and chemicals. Consumer financing, particularly auto loans, remained robust due to easing financial conditions and improved sentiment. Inflation Outlook Headline inflation has remained within the target range for three consecutive months, with food, energy, and core inflation converging as expected. However, the MPC cautioned that inflation may temporarily rise above the target toward the end of FY26 due to base effects before stabilizing again in FY27. Key inflation risks include:• Volatile global commodity prices• Energy price adjustments• Fiscal slippages• Uncertainty around wheat and food prices What the Policy Rate Cut Means for Businesses The 50 bps policy rate cut signals a cautiously supportive monetary stance, aimed at encouraging investment and credit expansion while preserving macroeconomic stability. However, many business stakeholders believe that further reductions may be necessary to fully unlock industrial growth, enhance export competitiveness, and support SMEs. With the policy rate having remained unchanged for seven months prior to this move, the decision represents a critical turning point in Pakistan’s monetary policy cycle.

Karachi, December 15, 2025 – The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) convened today for its final meeting of the calendar year, with market experts unanimously anticipating no change in the key policy rate, which has remained steady at 11% since May 2025.Analysts from Arif Habib Limited and a Reuters poll of 12 experts predict the central bank will maintain the status quo, citing fading base effects on inflation, a slight widening of the current account deficit, and the early stages of economic recovery. The International Monetary Fund (IMF) has also cautioned that inflation risks persist, urging policymakers to keep the stance “appropriately tight.” Read More: https://theboardroompk.com/imf-praises-pakistans-monetary-discipline-as-sbp-anchors-inflation-and-strengthens-economic-stability/ Headline inflation rose to 6.1% year-on-year in November from 5.6% in September, while core inflation held at 7.3%. Economic activity shows momentum through robust high-frequency indicators, but uncertainties loom from volatile global commodity prices—oil has dropped over 6% to around $57 per barrel—challenging export prospects, and potential food supply disruptions.Since the October MPC meeting, the Pakistani rupee appreciated marginally by 0.2%, petrol prices stayed stable, and the current account recorded a $112 million deficit in October after prior surpluses. SBP’s foreign exchange reserves climbed to $14.58 billion as of December 5, boosting total liquid reserves to $19.61 billion.Despite calls from industrialists for a rate cut to stimulate growth, forecasts for easing have been deferred to late FY26 (ending June 2026) or even FY27. The decision reflects a cautious approach to anchor inflation toward the 5-7% medium-term target amid recovering growth.

The Pakistan Stock Exchange (PSX) delivered a landmark performance last week, rewriting market history as the KSE-100 Index crossed the 169,800-point level for the first time ever and closed at a record high. The milestone reflects renewed investor confidence driven by improving macroeconomic indicators and positive developments on the IMF front. During the week, the benchmark index gained more than 2,700 points, successfully breaking two major psychological barriers at 168,000 and 169,000 points. This strong rally positioned the PSX among the best-performing regional markets. Market Capitalization Jumps by Rs282 Billion in One Week The bullish momentum translated into a sharp increase in market value. Over the five trading sessions, market capitalization rose by approximately Rs282 billion, while prices of over 50% of listed shares (50.43%) moved higher. According to market analysts, the rally was fueled by multiple confidence-boosting factors, including: • IMF approval of the second review under the Extended Fund Facility (EFF)• Disbursement of a $1.2 billion IMF tranche• A 9% year-on-year increase in workers’ remittances These developments encouraged investors to re-enter fundamentally strong and high-growth sectors, pushing the market to unprecedented levels. Weekly Performance Snapshot of PSX Indices The trading week remained largely positive, with three bullish sessions and two corrective days. • On bullish days, the index gained 3,660 points• On bearish days, it lost 889 points Index-wise Weekly Closing• KSE-100 Index:Rose by 2,779 points, from 167,085 to 169,864 points• KSE-30 Index:Gained 898 points, closing at 51,670 points• KSE All Share Index:Increased by 1,505 points, closing at 102,725 points Trading Activity and Market Breadth During the week, the PSX witnessed strong trading volumes and wide participation:• Highest index level: 170,697 points• Lowest index level: 167,386 points• Maximum weekly turnover:1.28 billion shares worth Rs55 billion• Minimum weekly turnover:873 million shares worth Rs40 billion A total of 2,411 companies were traded during the week:• 1,216 stocks advanced• 1,001 stocks declined• 194 stocks remained unchanged Most Active Stocks of the Week Stocks that dominated trading volumes included: PTCL, Bannu Woollen Mills, K-Electric, Kohinoor Spinning, WorldCall Telecom, First National Equities, Telecard, TPL Properties, The Searle Company, Fauji Fertilizer, PIA Holding Company, Bank of Punjab, Bank Makramah, Beco Steel, HUM Network, Fauji Foods, Packages Power, TPL Corporation, Sui Southern Gas, Pak International Bulk, Pace Pakistan, and Nishat Chunian Power. Outlook: Can the PSX Sustain the Momentum? Market experts believe that continued IMF engagement, stable foreign inflows, and improving external accounts could help sustain the upward trend in the near term. However, they caution that global economic conditions, interest rate expectations, and political stability will remain key variables to watch. For now, the PSX’s historic rally signals a strong comeback in investor sentiment and reinforces the stock market’s role as a barometer of Pakistan’s improving economic outlook.

SOFIA – In a dramatic blow to Bulgaria’s fragile political landscape, Prime Minister Nikolay Denkov’s 11-month-old coalition government resigned on Thursday amid massive street protests, plunging the European Union and NATO member into fresh uncertainty just three weeks before it adopts the euro currency on January 1, 2026.The resignation caps a turbulent year for the Balkan nation of 6.5 million, where public fury over corruption, soaring inflation, and sluggish judicial reforms boiled over into nationwide demonstrations. Tens of thousands rallied in Sofia and other cities, chanting “No to the mafia state!” and demanding snap elections. Denkov, a technocrat from the pro-EU We Continue the Change (PP) party, cited an inability to pass key anti-graft legislation as the tipping point, announcing the government’s collapse in a televised address. “The people’s voice must be heard,” he said, paving the way for President Rumen Radev to appoint a caretaker administration. For outsiders unfamiliar with Bulgaria’s woes, the crisis stems from a vicious cycle of instability since 2021. Sparked by anti-corruption probes implicating figures from the long-ruling GERB party of ex-premier Boyko Borissov, the country has endured seven parliamentary elections in four years. No single bloc has secured a stable majority in the fragmented 240-seat assembly, leading to short-lived coalitions riddled with infighting. The latest PP-GERB alliance, formed in June 2024, promised EU-aligned reforms to unlock billions in bloc funds but faltered on internal rifts and public distrust—approval ratings plummeted below 20%.The timing is perilous: Bulgaria’s euro accession, delayed since 2020, symbolizes economic integration after decades of post-communist transition. Adopting the single currency could curb inflation (currently 5.2%) and boost trade, but analysts fear instability might derail final preparations, risking investor flight and credit downgrades. Protesters are divided. “This is our chance for real change—a corruption-free Bulgaria in Europe,” said Sofia student activist Maria Ivanova, 22, waving an EU flag. Yet others, like retiree Petar Stoyanov, 68, worry about chaos: “We’ve had enough elections; who will govern while we fight over scraps?” With parliament’s term intact, snap polls could come by March, extending the deadlock.The EU has urged calm, with Brussels monitoring closely to safeguard cohesion funds. As winter bites, Bulgaria teeters between hope and havoc, its euro dreams hanging in the balance.

HOUSTON/LONDON/WASHINGTON, Dec 12 (Reuters) – The United States is ramping up its campaign against Venezuelan President Nicolas Maduro by preparing to intercept additional oil tankers, following this week’s seizure of a vessel carrying crude from the oil-rich nation. The move targets a shadowy fleet of ships evading sanctions and funneling oil to buyers like China, sources say, intensifying a long-simmering geopolitical feud. The interdiction marks the first direct U.S. seizure of a Venezuelan oil cargo since sanctions were imposed in 2019, suspending shipments worth nearly 6 million barrels, according to a source close to the matter. Venezuelan officials decried the action as “piracy” on international waters, while legal experts debate its compliance with maritime law, citing precedents under U.S. extraterritorial enforcement. This escalation coincides with a U.S. military buildup in the southern Caribbean, including naval deployments, as President Donald Trump—re-elected in 2024—vows to oust Maduro. Trump has branded the socialist leader a “dictator” and pledged harsher measures to starve his regime of revenue. The U.S.-Venezuela rift traces back to Maduro’s contested 2018 reelection, widely viewed as fraudulent by Western governments. In 2019, amid hyperinflation and humanitarian crisis, the Trump administration slapped crippling sanctions on PDVSA, Venezuela’s state oil company, freezing assets and barring U.S. firms from dealings. Washington recognized opposition figure Juan Guaido as interim president, sparking a global diplomatic standoff. Oil, comprising 95% of Venezuela’s exports, became the sanctions’ linchpin, aiming to defund Maduro’s security forces and force democratic elections. Yet Maduro clung to power, bolstered by allies Russia, Iran, and China, which imported discounted Venezuelan crude via “ghost” tankers—vessels with falsified flags and AIS trackers disabled. By 2023, under Biden, sanctions eased slightly to encourage dialogue, but Trump’s return has reversed course, invoking national security to justify interdictions. Analysts warn of ripple effects: Oil prices could spike if disruptions mount, while China—Venezuela’s top buyer—may retaliate with trade barriers. “This is economic warfare,” said Caracas-based economist Luisa Palacios. “Maduro’s grip weakens, but at what cost to global stability?” As U.S. vessels shadow the fleet, the showdown risks broader conflict, echoing Cold War-era proxy battles in Latin America.

SLAMABAD: The International Monetary Fund (IMF) has added 11 stringent new structural benchmarks to Pakistan’s $7 billion Extended Fund Facility (EFF), pushing the total number of conditions to 64 in just 18 months, according to the staff-level report for the second review released on Thursday.The fresh conditions focus heavily on governance failures and elite capture. By December 2026, asset declarations of high-level federal (and later provincial) civil servants will be published online, allowing banks to cross-check income-asset mismatches. An anti-corruption action plan targeting the 10 most vulnerable institutions must be published by October 2025, led by the National Accountability Bureau.In a direct attack on entrenched interests, the IMF has demanded a national sugar market liberalisation policy by June 2025, ending licensing distortions, price controls, zoning restrictions and discretionary import/export permissions long exploited by powerful mill owners.Remittance costs, projected to hit $1.5 billion annually, will undergo a comprehensive review with an action plan due by May 2025. The Federal Board of Revenue (FBR) faces sweeping reform deadlines, including a detailed roadmap by December 2024 and a full medium-term tax strategy by end-2025.Power sector losses prompted demands for private-sector participation in HESCO and SEPCO, alongside public service obligation agreements with seven major entities before the next budget.Alarmingly, the government has already agreed to present a mini-budget by December 2025 if revenue targets are missed, potentially raising federal excise duty on fertilisers and pesticides by 5%, imposing new duties on sugary items and shifting more goods to the standard 18% sales tax rate.Analysts warn the expanded conditionality reflects deepening IMF concerns over governance and reform ownership, with failure risking derailment of the entire programme.

The next few years may redefine what work looks like across several major industries and according to a leading OpenAI executive, the transformation has already begun. On a recent episode of the Unsupervised Learning podcast, Olivier Godement, Head of Product for Business at OpenAI, shared why he believes life sciences, customer service, and software engineering are entering an era of accelerated automation. His insights offer a candid look into how fast AI technologies are evolving and how businesses should prepare. 1. Life Sciences & Pharma: AI Is Becoming the New Research Partner: Godement’s first prediction is bold but grounded in real-world progress:the life sciences and pharmaceutical industries are on the brink of a major AI-driven shift. Working closely with companies like Amgen, Godement sees firsthand how drug discovery and development processes can be streamlined. “Once you lock the recipe of a drug, getting it to market takes months, sometimes years,” he explained. “Models are now very good at consolidating huge datasets and tracking document changes. A lot of this admin work can be automated.” In an industry where delays cost billions and impact human lives, AI automation could radically shorten development timelines, reduce operational overhead, and accelerate medical innovation. 2. Software Engineering: The Most Heated Debate in Tech: Few topics have sparked more controversy in 2024 and 2025 than the future of software engineering. According to Godement, while AI isn’t replacing engineers outright “yet” the trajectory is clear. “We’re not at the point of fully automating a software engineer’s job. But we now have a line of sight to get there.” AI-powered coding tools have already become standard across tech companies. Large models can generate boilerplate code, debug issues, review pull requests and even propose architectural solutions. A recent Indeed report reinforces the shift: software engineers, QA engineers, product managers and project managers are the four roles most frequently cut during tech layoffs, largely due to automation and restructuring. The message is unmistakable:coding is becoming more automated, and the nature of engineering roles is evolving fast. 3. Customer Service & Sales: Automation Is Closer Than We Think: Customer-facing roles may feel safe for now, but Godement believes the next two years will bring surprising changes. Working with companies like T-Mobile, OpenAI is already seeing customer support tasks automated at scale with high accuracy. “We’re achieving strong results at meaningful scale. My sense is we’ll be surprised in the next year or two at how many tasks can be reliably automated.” From chat support to sales assistance and ticket resolution, AI systems are becoming more conversational, reliable and available 24/7 making them valuable assets for large enterprises. Are White-Collar Jobs at Risk? Industry Leaders Say Yes: Across Silicon Valley, warnings are growing louder. AI pioneer Geoffrey Hinton, known as the “Godfather of AI,” recently said that while physical jobs like plumbing remain safe for now, intellectual and clerical roles face the greatest risk. “For mundane intellectual labor, AI is going to replace everybody,” Hinton said.He even admitted he’d be terrified to work in a call center today. Paralegals, administrative staff, analysts and customer support agents: these are roles where AI is already outperforming humans in speed, accuracy and cost. The Bottom Line: AI Isn’t Coming, It’s Already Here: Olivier Godement’s insights reflect a bigger trend: The AI revolution is touching every corner of the business world. Industries at the forefront:• Life Sciences → Faster drug discovery, automated documentation• Software Engineering → AI-assistance becoming the norm• Customer Service & Sales → Massive automation potential at enterprise scale As AI systems improve, the businesses that adapt early will lead and those that don’t may struggle to survive.

The Pakistan Stock Exchange (PSX) witnessed a turbulent trading session on Thursday as the benchmark KSE-100 Index closed with a notable decline, ending the day at 168,574.69 points, down 877.17 points or 0.52%. After weeks of strong upward momentum, investors opted for profit-taking, triggering a broad-based selloff across major sectors. Volatility Dominates: Index Swings Over 1,700 Points: The market remained highly volatile throughout the session. The KSE-100 surged to an intraday high of 170,301.48 points (+849.62), but heavy selling pressure later dragged it down to an intraday low of 168,548.45 points (-903.41) a massive swing of 1,753 points. The benchmark index recorded a strong activity level, trading 656.55 million shares, reflecting sustained investor participation despite the bearish close. Market Breadth Turns Negative: Out of the 100 companies on the index:• 30 stocks closed higher• 68 declined• 2 remained unchanged The day clearly belonged to the sellers. Top Performers & Major Losers: Top GainersDespite the decline, a few stocks delivered impressive gains:• NML (+10.00%)• KAPCO (+10.00%)• SSGC (+7.50%)• GADT (+7.17%)• PABC (+5.30%) Top LosersSeveral major names came under intense pressure:• ISL (-6.62%)• PKGP (-6.51%)• PSEL (-5.80%)• INIL (-5.75%)• DHPL (-5.33%) Who Moved the Index? Key Contributors: Top Negative Contributors• FFC (-232.66 pts)• LUCK (-150.29 pts)• HBL (-97.52 pts)• PSEL (-85.26 pts)• HUBC (-63.40 pts) Top Positive Contributors• ENGROH (+86.63 pts)• NML (+86.60 pts)• OGDC (+57.57 pts)• KAPCO (+49.60 pts)• AICL (+37.86 pts) These gains helped cushion what could have been a steeper fall. Sector-Wise Performance: Cement & Banking Under Pressure: A deeper breakdown shows that multiple heavyweight sectors dragged the index into the red: Sectors Pulling the Index Down• Cement (-343.52 pts)• Fertilizer (-264.87 pts)• Commercial Banks (-253.96 pts)• Miscellaneous (-70.31 pts)• Engineering (-64.48 pts) Sectors Providing Support• Textile Composite (+108.80 pts)• Oil & Gas Exploration (+57.15 pts)• Investment Banks / Securities (+48.09 pts)• Insurance (+37.86 pts)• Technology & Communication (+26.22 pts) Broader Market Also Slips: The overall market followed a similar trend.The All-Share Index closed at 102,171.27 points, losing 383.53 points or 0.37%. • Total market volume: 1,288.97 million shares (higher than yesterday’s 1,190.53m)• Traded value: Rs 55.23 billion (up Rs 4.74 billion)• Total trades: 429,816 across 485 companies Among these:• 189 stocks advanced• 257 declined• 39 remained unchanged Despite Today’s Drop, KSE-100 Still on a Stellar Run: Even with Thursday’s correction, the market’s bigger story remains overwhelmingly positive. The KSE-100 has gained:• +42,947 points (34.19%) in FY 2025-26• +53,448 points (46.43%) in CY 2025 This makes PSX one of the world’s strongest performing equity markets this year.

Islamabad, December 11, 2025 – The All Pakistan Motor Dealers Association (APMDA) has urgently appealed to Prime Minister Shehbaz Sharif to intervene and reverse the Economic Coordination Committee’s (ECC) December 9 decision that abolished the popular Personal Baggage Scheme, Gift Scheme, and Transfer of Residence (TR) Scheme for overseas Pakistanis bringing vehicles into the country. In a strongly-worded letter dated December 11, APMDA Chairman H.M. Shahzad warned that the sudden scrapping of these decades-old schemes will deliver a devastating blow to the automobile import sector and the livelihoods of millions of Pakistanis linked to it. Read More: https://theboardroompk.com/imc-proposes-maintaining-40-tariff-difference-in-upcoming-auto-policy/ Overseas Pakistanis remit over USD 40 billion annually and, under the previous schemes, were allowed to import one vehicle every two years on concessional duty. In fiscal year 2024-25 alone, the sector contributed nearly USD 500 million to national exchequer through duties and taxes, the letter highlighted. The association argued that the ECC’s move, ostensibly to curb misuse, has instead punished genuine overseas Pakistanis and pushed thousands of authorised importers, clearing agents, and ancillary workers toward unemployment. Commercial importers, meanwhile, continue to enjoy significantly higher duty concessions, creating an uneven playing field. “On one hand, harsh conditions have been imposed on vehicles arriving under TR, Baggage and Gift schemes; on the other, commercial vehicle imports have been subjected to highly unreasonable terms. This dual pressure is pushing the entire automobile import business toward collapse,” the letter stated. APMDA has requested an immediate high-level meeting with the Prime Minister and relevant ministries to present detailed data and propose safeguards that protect revenue without destroying the overseas Pakistanis’ facility