Arif Habib Limited (AHL), the investment banking arm of the legendary industrial corporation, stated on Friday that it anticipates inflation will return to single digits in the second half of the next year on account of the high base effect, monetary easing, currency stabilization, and a slowdown in global commodity prices.
AHL CEO Shahid Ali Habib, while talking to the press conference at the inauguration of a report titled “Pakistan Investment Strategy 2022,” conveyed that the inflation attitude depends on the speed of domestic demand, fuel, and electricity tolls besides global commodity prices.
“As the year progresses, we expect aggregate supply (is) likely to catch up with demand and bottlenecks in global commodities and other goods markets (will) be resolved,” he remarked, saying that merchandises charges are likely to “moderately slow down” in the mid of 2022 with a pick-up in supplies.
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Moreover, Arif Habib Limited believes the policy percentage to rise from the existing 9.75 percent to 10 percent by June. As inflationary stresses are likely to diminish in the second half of 2022, the standard interest rate will decay and close the calendar year at 9.25 percent, he said.
The gratuity house believes the country’s external account will be under pressure in the coming term and recuperate in the second half of 2022.
“Despite challenges on the external front, the current account deficit is expected to be fully financed from external inflows, and the foreign exchange reserves are expected to remain at adequate levels through the rest of the fiscal year,” he said.
Meanwhile while talking about the fiscal side, he said the revenue collection is projected to advance with the government aiming to remove certain tax releases while limiting current and development expenses.
“Over the next few quarters, our base-case foreign exchange outlook is less pessimistic than initially feared. We expect the rupee to reach Rs 178 by June and Rs 183 by December,” he said, adding that the Financial Action Task Force is expected to promote Pakistan’s status from the grey list to the white list by the end of 2022.
