Pakistan court directs government to engage with Imran Khan’s party over Nov. 24 protest

KARACHI: Moody’s, a leading global credit rating, research and risk analysis firm on Wednesday upgraded the Pakistani banking sector’s outlook from stable to “positive,” saying it reflected the country’s improving macroeconomic conditions. 

Moody’s Investors Service periodically issues assessment reports to help its clients protect themselves against economic and financial risks.

The assessment comes amid improving macroeconomic conditions in Pakistan, which include inflation slowing to a near-decade low of 1.5 percent in February. Pakistan expects to achieve 3.6 percent economic growth this fiscal year and hopes its foreign exchange reserves increase beyond $13 billion by June. 

“Moody’s Ratings has changed the outlook on Pakistan’s banking system to positive from stable to reflect the banks’ resilient financial performance as well as improving macroeconomic conditions from very weak levels a year ago,” the firm said in a statement. 

Moody’s said the positive outlook also mirrors the government’s Caa2 positive outlook, which the rating agency issued last August. It said Pakistani banks have had significant exposure to the sovereign through their large holdings of government securities, which account for around half of total banking assets.

However, the firm warned that Pakistan’s long-term debt sustainability remains a key risk with its still “very weak” fiscal position, high liquidity and external vulnerability risks.

“We expect the Pakistani economy to expand by 3 percent in 2025, compared with 2.5 percent in 2024 and -0.2 percent in 2023,” Moody’s said. 

It noted that inflation is also significantly easing in the country, which the rating agency said it estimated at around 8 percent for the year 2025 from an average of 23 percent in 2024. 

Moody’s said Pakistan’s problem loan formation will also slow as borrowing costs and inflation reduce, although net interest margins will narrow on the back of interest rate cuts. 

“Banks will maintain adequate capital buffers, supported by subdued loan growth and solid cash generation, despite dividend payouts remaining high,” it said. 

Pakistan has undertaken financial reforms related to its energy and tax sectors and attempted to privatize its loss-making enterprises in line with the IMF’s demands.

Moody’s rating upgrade takes place as a staff mission of the International Monetary Fund (IMF) is in Pakistan to hold its first review of the country’s economic performance under its $7 billion Extended Fund Facility (EFF) program.

QUETTA: The Pakistan army took control of a main railway station in the southwestern Balochistan province where dozens of empty coffins were brought on Wednesday, an eyewitness said, as security forces continued a rescue operation to free hundreds of people taken hostage by separatist militants who hijacked a train a day earlier.
The separatist Balochistan Liberation Army (BLA) bombed part of a railway track and stormed the Quetta-Peshawar-bound Jaffar Express on Tuesday afternoon in Mushkaaf, an area in the mountainous Bolan range of Balochistan. The group said on Tuesday night it was holding 214 people as hostages, including military, police and intelligence officials, while a security official said 190 passengers had been rescued by Wednesday afternoon. 
The province has been the site of a low-level separatist insurgency for decades, with separatist groups accusing the government of stripping the province’s natural resources and leaving its people mired in poverty. They say security forces routinely abduct, torture, and execute ethnic Baloch, allegations echoed by human rights campaigners. Government officials and security forces strongly deny violating human rights and say they are uplifting the province through development projects, including multi-billion-dollar schemes funded by China.

On Wednesday afternoon, an Arab News eyewitness described seeing dozens of empty coffins being brought to the Quetta Railway Station in the provincial capital. He said the station was overrun with army personnel while dozens of family members of hostages had arrived in search of their loved ones. These included the family of Amjad Yasin, the 50-year-old driver of the Jaffar Express, who officials said on Tuesday had been killed in the assault. 
“We have been contacting railway officials since yesterday, but no one is telling the truth,” Amir Yasin, the driver’s younger brother, told Arab News. 
“There are multiple reports coming about my brother’s death but how can we believe it until we see his body?” 

Ghulam Muhammad Sumroo, a railway official, told Arab News 16 passengers, including two injured Railway Police officers, had reached Mach Railway Station and were being moved to Quetta, the provincial capital.
Muhammad Abid, a railway employee who was on the train and arrived at Mach Station, described the attack as the most “horrific day” of his life.
“We were sitting in one of the compartments of Jaffar Express when a powerful explosion targeted the train and intense firing started,” he told Arab News over the phone. 
“We hid in the washrooms with other passengers, but then armed men came in and off boarded us from the train,” he added. “After checking our identity cards, they asked us to run on the track. My life flashed before my eyes when I saw dozens of armed men standing on the railway track.”
Muhammad Ashraf, a 68-year-old passenger traveling to Hafizabad in Punjab to meet his daughter, said that when the train departed from Paneer Railway Station, he heard an explosion about seven to eight kilometers into the journey, followed by intense gunfire, saying many people had been killed and injured.

“Armed men boarded the train and asked everyone to leave the train or prepare to die,” he told Arab News, adding that the militants made the passengers walk on the tracks for three and a half hours on foot.
Ashraf said the militants had detained over 200 passengers, in his rough estimate.
One security official with direct knowledge of the ongoing rescue operation to take back control of the train and free hostages said 190 passengers had been freed and at least 30 militants had been killed. 
He said there were suicide bombers aboard the train, who were using women and children as “human shields.”

“Due to the presence of women and children with suicide bombers, extreme caution is being exercised in the operation,” the official said. “Security forces are continuing their operation to eliminate the remaining terrorists.”
The official said the militants were in touch with their “handlers” in Afghanistan, echoing a common accusation by Pakistani security and government officials that a recent spike in militancy was being orchestrated from the neighboring country. The Taliban rulers in Kabul deny they allow Afghan soil to be used by insurgents to plan or carry out terror attacks.
In a statement issued on Wednesday, the BLA, which has demanded a prisoner exchange within 48 hours, said the Pakistan government was not taking its demands seriously and was trying to free hostages through military action.
“BLA warns the enemy that if the Pakistani army commits any further aggression, even if a single bullet is fired, 10 more personnel will be eliminated,” it said.
“If our demands are not met within [the stipulated] time and the state’s stubbornness continues, then 5 hostages will be eliminated for every passing hour after the ultimatum ends.”