Business Monitor International


Pakistan Business Forecast Report

Published 29 January 2014

  • 49 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Pakistan Business Forecast Report

Core Views:

  • Pakistan's economy is picking up strongly, with the IMF's reform initiatives having a positive impact on the manufacturing sector. We believe that the Fund will release the third loan tranche of the Extended Fund Facility (EFF) over the coming months, given the progress so far, and see upside risks to our already-above consensus real GDP growth forecast for FY2013/14 of 3.4%. We continue to forecast an acceleration in growth to 4.0% in FY2013/14.

  • The appreciation of the Pakistani rupee since December 2013 has been nothing short of spectacular. The currency has strengthened by over 10% from the December trough, and while there have been some genuinely positive signs on the macroeconomic front, the unprecedented move may also have stemmed from the State Bank of Pakistan's (SBP) desire to send a message that the rupee is not a one-way losing bet. However, we expect the recent strength to subside over the coming months, and forecast the unit to weaken back to PKR100.00/US$ over the coming months.

  • We believe that headline consumer price inflation (CPI) will continue on its broadly declining trend over the coming months and quarters as money supply growth continues to cool, the impact of the stronger rupee keeps imported price inflation muted, and supply-side developments continue to gather momentum. We are forecasting CPI to end FY2013/14 and FY2014/15 at 7.5% and 6.5% respectively.

  • Pakistan's recent US$1.5bn 'gift' from Saudi Arabia has raised a number of questions regarding the implications for the former's stance on Syria, and the Iran-Pakistan (IP) gas pipeline project. With the Pakistani economy in a fragile state, and in great need of external financing, the grant was difficult to refuse, but is likely to lead to a further deterioration of relations with neighbouring Iran.

Major Forecast Changes:

  • We have upgraded our FY2013/14 real and FY2014/15 exchange rate forecasts for the rupee, owing to the intense strength seen at the start of...

Table of Contents

BMI Methodology
5
BMI Risk Ratings - Oman
6
BMI Risk Ratings - Yemen
7
Middle East - Ratings League Tables
9
Executive Summary - Oman
11
Middle East - Ratings League Tables
9
Core Views
11
Key Risk To Outlook
11
Chapter 1
13
SWOT Analysis
13
Foreign Policy
14
Omani Opposition Highlights 'Gulf Union's' Weak Prospects
14
table: Political Overview
14
Long-Term Political Outlook
15
Royal Succession: Who Is Next In Line-
15
Chapter 1
19
SWOT Analysis
19
Economic Activity
20
Economic Diversification: Strong Potential Ahead
20
TABLE: ECONOMIC ACTIVITY
20
TABLE: OMAN - GAS PRICES FOR INDUSTRIAL CONSUMERS
21
TABLE: OMAN - SECTORS' CONTRIBUTION TO OVERALL GDP, CURRENT PRICES
21
Trade Outlook
24
Opportunities From Iran Sanctions Relief
24
table: CURRENT ACCOUNT
24
Banking Sector
25
Moderate Lending Growth Over 2014
25
table: OMAN - BANKING SECTOR OVERVIEW
26
Regional Economic Outlook
27
Key Themes Of 2014
27
table: Oman Commercial Banking Sector - A Changing Regulatory Environment
27
Chapter 1
31
The Oman Economy to 2023
31
The Next Episode: Shifting Away From Oil
31
table: Long-Term Macroeconomic Forecasts
31
Chapter 1
33
SWOT Analysis
33
Business Environment Outlook
34
Institutions
34
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
34
TABLE: BMI LEGAL FRAMEWORK RATING
35
Infrastructure
36
TABLE: LABOUR FORCE QUALITY
36
Market Orientation
37
TABLE: MENA - ANNUAL FDI INFLOWS
37
TABLE: TRADE AND INVESTMENT RATINGS
38
Operational Risk
39
TABLE: TOP EXPORT DESTINATIONS, 2000-2008
39
Executive Summary - Yemen
39
Core Views
41
Key Risk To Outlook
41
Chapter 2
43
SWOT Analysis
43
Domestic Politics
44
Political Uncertainty Exacerbating Security Risks
44
table: Yemen political overview
44
Long-Term Political Outlook
46
Turbulent Decade Ahead: Scenarios For Change
46
Chapter 2
51
SWOT Analysis
51
Economic Activity
52
Growth Remaining Modest In 2014
52
table: ECONOMIC ACTIVITY
52
Monetary Policy
54
Interest Rates To Stay Unchanged In 2014
54
table: Consumer price INFLATION
54
Chapter 2
57
The Yemeni Economy to 2023
57
Oil And Water: Not Enough Of Either
57
table: Long-Term Macroeconomic Forecasts
57
Chapter 2
59
SWOT Analysis
59
Chapter 3: BMI Global Assumptions
61
Global Outlook
61
Momentum To Continue In H114
61
Table: Global Assumptions
61
Table: Developed States, Real GDP GrowtH, %
62
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
62
Table: Emerging Markets, Real GDP Growth, %
63

The Pakistan Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Pakistan and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of Pakistan's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Pakistan's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Pakistan's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in Pakistan, including currency volatility, the commodity price boom and protectionist policies.

The Pakistan Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Pakistan economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for Pakistan through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Pakistan Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Pakistan and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Pakistan, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Pakistan over the next 5-years?

BMI's Pakistan country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Pakistan Market - Political Strengths, Weaknesses, Opportunities and Threats facing Pakistan.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for Pakistan's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Pakistan's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for Pakistan, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of Pakistan's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

Key Sector Outlook

Which industry sectors in Pakistan will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Pakistan's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2008-2012, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2013-2017, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express