Anticipated 7% Policy Rate Cut by SBP in 2024 Amidst Easing Inflation: Bloomberg

The State Bank of Pakistan (SBP) is poised to initiate a series of key rate cuts starting from March, propelled by a deceleration in inflation. Bloomberg forecasts suggest a potential cumulative reduction of 700 basis points by the conclusion of 2024.

As the global landscape evolves, two prevailing trends are shaping the outlook for emerging markets in the coming year. Firstly, there is a discernible decline in interest rates, and secondly, companies are increasingly inclined to localize their supply chains.

In the context of emerging markets, the anticipated rate cuts by central banks in 2024 are anticipated to provide a supportive environment for economic growth.

Bloomberg's December inflation projections reveal a positive trajectory for Pakistan. The average quarterly inflation is expected to dip below 25% in the first quarter of 2024, further reducing to below 15% in the second quarter. By the fourth quarter of the same year, it is anticipated to stabilize at around 10%.