Pakistan's economy shows paper improvements while underlying risks persist

Pakistan's soaring stock market, record foreign reserves of $21.5 billion, and credit-rating upgrades signal an improving economy on paper.

High energy costs driven by the US-Iran war and renewed militancy in border provinces continue to inflate prices and pose risks.

The State Bank of Pakistan raised interest rates by 50 basis points to 12% following inflation concerns as oil prices surpassed $100 a barrel.