On April 3, 2025, the Pakistan Stock Exchange (PSX) experienced a significant surge, with the benchmark KSE-100 Index climbing 1,131.37 points (0.96%) to close at a record high of 118,938.11. The index reached an intraday peak of 119,179.45 points, marking a 1.17% increase from the previous close. ​

Catalyst for the Market Rally

The bullish momentum was primarily driven by Prime Minister Shehbaz Sharif’s announcement of substantial reductions in electricity tariffs aimed at alleviating economic pressures on consumers and stimulating industrial growth. Key details of the relief package include:​

  • Domestic Consumers: A reduction of Rs7.41 per unit, lowering the cost to Rs34 per unit.
  • Industrial Users: A reduction of Rs7.59 per unit.

This initiative is part of the government’s broader strategy to enhance economic productivity and ease inflationary pressures on households and businesses. The tariff reductions were approved following consultations with the International Monetary Fund (IMF), which had earlier consented to a Re1 per kilowatt-hour cut under its ongoing $7 billion loan program.

Economic Context

The tariff cuts are indicative of Pakistan’s efforts toward economic stabilization. The country has been implementing power sector reforms and benefiting from a recent IMF bailout, which have collectively contributed to improved economic indicators. Inflation has decreased to single digits, and interest rates have been reduced by nearly 10 percentage points over the past year, facilitating business growth in the $350 billion economy. ​

The PSX’s record performance reflects investor confidence in the government’s economic policies and the positive impact of reduced electricity costs on the business environment.