The stock market witnessed a volatile trading session on Friday, as investor sentiment wavered between optimism over easing inflation and concerns about rising trade deficits and tax shortfalls. The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index hit intraday high of 117,891.62 and intraday low of 115,580.01, before closing at 117,586.98, up 467.33 points or 0.4% from the previous session's 117,119.65. Prime Minister Shehbaz Sharif, addressing the 11th Apex Committee meeting of the Special Investment Facilitation Council (SIFC) on Thursday, reiterated the significance of political stability for sustained economic growth.  He expressed satisfaction with Pakistan’s improving macroeconomic indicators, including a historic decline in inflation to 4.1%, a 34% rise in remittances, increased exports, and foreign exchange reserves climbing to $12.5 billion. The prime minister also noted that the policy rate of 13% offers room for further reduction, given the declining inflation trend. The premier also emphasised the need for export-led growth and highlighted ongoing efforts to attract foreign investment, with significant agreements signed with Saudi Arabia, Qatar, and the UAE. However, economic challenges persist. The Federal Board of Revenue (FBR) reported a significant tax shortfall of Rs386 billion in the first half of FY2024-25. The total revenue collection amounting to Rs5,623 billion, falling short of the International Monetary Fund's (IMF) indicative target of Rs6,009 billion. Adding to the challenges, Pakistan's trade deficit surged to $2.44 billion in December 2024, a 35% year-on-year increase and the highest level since April.  Exports rose marginally by 0.67% year-on-year to $2.84 billion, while imports jumped by 14% to $5.285 billion, marking a 47% month-on-month spike in the trade deficit compared to November. Despite these concerns, inflation trends offered some relief. The Consumer Price Index (CPI) inflation for December fell to 4.1% year-on-year, the lowest in six and a half years, compared to 4.9% in November and 29.7% in December 2023.  This decrease in inflation numbers provided hope for further monetary easing in the near term. On Thursday, January 2, 2025, the KSE-100 Index closed at 117,119.65, registering a modest gain of 111.57 points or 0.1% from the previous session.