Islamabad: The KSE-100 index reached new heights this week, closing at 154,277 points, a 3.8% increase week-on-week. This surge in the stock market occurred despite a widening trade deficit and a shortfall in tax revenue collection. Average daily trading volume also saw a significant rise, increasing by 19% week-on-week to 1,068 million shares.

Foreign investors continued to be net sellers, offloading US$9.5 million worth of shares. This divestment was, however, largely absorbed by local investors, predominantly individuals and mutual funds.

The Consumer Price Index (CPI) for August 2025 registered at 3% year-on-year, showing a 0.6% decrease month-on-month. The nation's trade deficit broadened to US$2.87 billion in August, a 30% year-on-year expansion, fueled by a 6% rise in imports and a 12.5% decline in exports.

The Federal Board of Revenue (FBR) missed its monthly revenue collection target of Rs950 billion for August 2025 by Rs64 billion. The total revenue collected during the first two months of fiscal year 2026 reached Rs1.63 trillion.

In a significant financial maneuver, Pakistan made an early repayment of Rs1.6 trillion in public debt to the State Bank of Pakistan.

Prime Minister Shahbaz Sharif’s meeting with Chinese President Xi Jinping reaffirmed Pakistan's dedication to the China-Pakistan Economic Corridor (CPEC) and its expansion into a second phase, encompassing five new economic corridors.

The government successfully raised Rs515 billion in the recent T-bill auction, surpassing its target of Rs400 billion, with yields remaining relatively stable compared to previous cut-offs. Finally, the State Bank of Pakistan’s reserves saw a modest increase of US$28 million week-on-week, reaching US$14.3 billion.