Pakistan's stock market took a beating again on Thursday, prompting a halt in trading at the Karachi Stock Exchange (KSE) amid rising geopolitical tensions.
The KSE fell over 6% before trading was halted on Thursday. This is the continuation of a long slide in the market since the deadly terrorist attack at Pahalgam.
Karachi Stock Exchange's benchmark KSE-100 Index has fallen more than 13% since the devastating attack of April 22, which claimed the lives of 26 people, of which the majority were tourists.
The KSE-100 was trading at 118,430 points on April 22, but has since plummeted to 103,060.
The KSE-30 index has also fallen more than 14% since April 22.
Insult to the injury, Pakistan's foreign exchange reserves have dwindled to a minimum $15 billion, and the country teeters on the brink of an economic meltdown.
In a bid to arrest the rot and shore up its economy, Pakistan is seeking a fresh loan of $1.3 billion from the International Monetary Fund (IMF).
In its early years following independence, the Pakistani economy grew at a similar pace as India, facilitated by the aid and grants of America and affluent oil-exporting Islamic states.
Unlike India, however, Pakistan has been plagued by violent coups and military dictatorship, with the army generals still holding immense power, normally instigating aggression against its richer neighbor.
In 2023, Pakistan balanced on the verge of sovereign default and was bailed out by a $3 billion IMF bailout package.
The country is still desperate for this life support and under pressure to borrow another $1.3 billion to enhance climate resilience.
Thus, Pakistan is currently in an economic free fall, greatly affected by political instability and the ultimate weight of fostering terrorism.
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