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5️⃣ Why IMF Is Bullish for PSX — But Only Temporarily
IMF programs are bullish because they:
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Avert sovereign default
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Anchor FX expectations
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Restore banking confidence
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Improve visibility for institutions
But they cap upside because they:
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Suppress consumption
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Raise input costs
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Limit credit expansion
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Delay capex cycles
This is why IMF-led rallies are often sharp, fast, and narrow. Pakistan may exit the IMF programme within six months due to defence-related export inflows. Is PSX cheap or just stuck?
6️⃣ The 2023–26 Shift: Why Recent IMF Cycles Look Different
Post-2023, PSX responses to IMF have been stronger due to:
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Near-default conditions prior to SBA
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Severe FX stress reversal
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Global EM liquidity seeking yield
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Heavy domestic retail participation
Example:
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