Pakistan’s Economic Outlook Buoyed by Declining Inflation and Trade Dynamics

Karachi: The State Bank of Pakistan (SBP) has initiated a monetary easing cycle, attributed to a significant drop in inflation. This move is aimed at addressing challenges from trade tariffs and geopolitical tensions while benefiting from anticipated improvements in financial inflows.

The Monetary Policy Committee (MPC) of the SBP foresees the current account (CA) remaining in surplus. This optimistic outlook is bolstered by strong remittance flows, an increase in exports, and a reduction in imports, influenced by declining commodity prices.

AKD Securities Limited suggests that the improving macroeconomic indicators, alongside reduced border tensions and lower commodity prices, will enhance Pakistan’s economic outlook. The country’s relatively favorable position among exporting peers during the ongoing trade war is expected to support a return to single-digit interest rates by calendar year 2025.