Pakistan Economy: Persistent inflationary pressures narrow reform window, (AKD Daily, Oct 21, 2020)
- Preliminary price trends for Oct’20 indicate another wave of inflationary pressures, with steep increase in food prices (particularly perishables) and quarterly housing rent adjustment are expected to push headline inflation to 9.35%YoY vis-à-vis 9.03%YoY in the preceding month and 11.04%YoY in Oct’19.
- Favorable high base, potential decline in transportation index following cut in HSD prices and negative utility adjustment on account of lower fuel charge adjustment (FCA) will partially offset the impact of food price spike, leading to overall soft reading for the month. On a MoM basis, inflation is likely to jump to 2.1%MoM vs. 1.53%/1.81%MoM in Sep’20/Oct’19.
- We flag the recent spike in headline inflation as having a limited impact on monetary policy at least in the short run, as the majority of price increases are of transitory in nature. We expect these prices to normalize going forward following administrative actions by the gov’t. We expect the interest rates to hold steady at least until Mar’21.
- That said, the recent surge in food prices together with elevated domestic political noise has clearly narrowed the window for gov’t to continue with its reforms, which could potentially have bearings on IMF program timeline
AKD Research
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.