Uncertainty subsides over rise in reserves, tax receipts

Pakistan’s economic, trade and investment policy uncertainty eased in September 2026, with the Lahore School of Economics’ overall uncertainty index falling 24.21% month-on-month to 162.46. The Express Tribune reported that the State Bank held its policy rate at 11.5% during the month, foreign exchange reserves rose to $26.8 billion and the Federal Board of Revenue met its first-quarter revenue target. Income tax receipts nevertheless fell short, while concerns about fuel costs, subsidies and stalled IMF talks remained.

Trade uncertainty also declined, with the trade index down 22.1% to 192.89, as the August trade deficit narrowed and exports in July and August grew 7% year-on-year. Investment uncertainty fell 6.45% to 145, supported by power-sector reforms and a $3 billion Eurobond issue. But uncertainty over the auto policy, fuel subsidies and energy-sector receivables persisted; Brent crude exceeded $100 per barrel amid disruption to shipping through the Strait of Hormuz. The report also noted that the SBP raised its policy rate by 50 basis points to 12% on Monday.