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2021 Preview – Pakistan likely to see continuous recovery in several economic aspects

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December 21, 2020 (MNL): To say that 2020 was a rollercoaster ride for Pakistan would be both an apt description as well as an utter underestimation. Years from now on, nations across the globe would look back and remember the year for the calamities and mishaps it brought due to the outbreak of COVID, but in Pakistan’s case, 2020 would be reminisced for bringing recovery that honestly seemed impossible prior to the pandemic.

Be it stock markets or exchange rate, inflation or current account balance, the country exceeded expectations in every economic aspect and at various points, even delivering record-breaking results. Now that 2020 is nearing its end, the question remains whether the country would be able to extend the same spirit and momentum in 2021 as well.

While no one can answer this question with absolute certainty, some predictions and guesses have been made regarding what 2021 would look like for Pakistan. In this regard, Topline Securities conducted a survey that gathered opinions from Fund Managers of top brokerage houses, as well as some corporations, regarding important economic aspects and how they will change in the upcoming year.

According to the report, the majority believes that the GDP is likely to grow by 1.1-2%, whereas the rest believes that it will rise by 2.1-3%. With regards to the exchange rate, the report states that PKR will fall within range of 160-165 by December 2021, with some suggesting it might even go up to 170 per USD.

In relation to the inflation rate, the survey gathered that it might hover within the range of 8.5%-9% in next year. Speaking of inflation, the majority predicted that the Policy Rate will most likely be tightened in the next year, probably during the month of May. Half of the participants believed that during the year FY21, the policy rate will be increased by up to 150 bps.

The KSE-100 index, which has shown some remarkable progress in the past few months, is likely to continue its upward trend in the next year as well owing to improvement in the overall economic situation of the country. As per the report, the benchmark index is likely to touch 50,000-mark by December 2021. 29% of the total participants believed that it might go up to 55,000 points.

Most of the participants were of the view that foreign investors will continue with net selling of securities within the range of $100-$200 million. However, Topline Securities believes that it may go up to $300 million during the year.

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Posted on: 2020-12-21T16:02:00+05:00

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