KARACHI, February 23: Swiss financial services firm Credit Suisse in its latest report has concluded that Pakistan’s fundamentals have “improved significantly” but warned of “challenges” that lie ahead.
Titled “Pakistan: On the path to recovery”, the firm
credited “assistance from the International Monetary Fund (IMF)”, “fiscal consolidation”, and “much needed reforms” for the improvement in country’s economic condition.
“Near term, we expect equities to remain range-bound after a strong rally, but the long-term upside potential remains significant,” the Zurich-based firm said.
The firm added that it was also expecting the State Bank of Pakistan (SBP) to slash interest rates in the range of 100 to 200 basis points in the second half of this year as the IMF-driven rupee stepped back to stability path.
The financial services firm said it seems too early for a rate cut and “we believe the SBP will most likely await firm signs of disinflation before doing so”.
“In addition, real rates remain low implying limited pressure for rates to be reduced in the near term,” it said.-Agencies
