Pakistan Economy_Inflation to clock in at 23.1% in Jul'22, (AKD Daily, Jul 29, 2022)
AKD Daily Pakistan Economy: Inflation to clock in at 23.1% in Jul’22 · We preview CPI inflation during the month of Jul’22 to clock in at 23.1%. This comes on the back of monthly inflation of ~2.8%MoM. The major contributions come from spike in the prices of perishable food items, increase in administered petroleum prices, revision in electricity tariffs and quarterly revision in HRI during the month of July. · This will be the highest monthly inflation reading since Nov’08 where the CPI inflation was recorded at 24.7%. The headline inflation comes with rural inflation expected at 24.7% while urban inflation is likely to settle around 22.1% during the month. · Global commodities have started easing off significantly with FAO index down by 4.1%from May’22. An ease off in global commodity prices should ordinarily result in easing off inflationary pressures in the country, however, recent bouts of currency depreciation will likely neutralize the impact. · Inflation is likely to remain downward sticky owing to i) further increase in POL products prices moving forward (increase in PL to PkR50/ltr, and resumption of GST), ii) increase in energy tariffs, and iii) hefty depreciation seen over the last few months. Consequently, our FY23 average inflation estimate currently stands at 21.4%. · With real interest rates still in the negative zone, SBP will likely be forced to upward revise the interest rates even further. However, we may see interest rates stabilizing around 16% - 16.5%, resulting in real interest rates remaining negative throughout FY23. AKD Research
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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.
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