Pakistan’s central bank is expected to cut interest rates by at least 100 basis points (1%) this fiscal year, according to a Bloomberg analysis. The forecast cites manageable inflation (projected to average 6%), a modest current account deficit (0.3% of GDP), and the State Bank of Pakistan’s capacity to reduce rates by up to 250 basis points.
Bloomberg’s model, which considers inflation, economic output gaps, and fiscal health, supports this prediction. Earlier surveys had anticipated a larger drop from 11% to 9%. Meanwhile, JP Morgan projects an even steeper 300 basis point (3%) cut, potentially lowering rates to 8%.
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