KARACHI: Pakistan can achieve a growth rate of 3.5 to 4 per cent if inflation remains under control and the central bank continues to ease interest rates, though the State Bank of Pakistan may have reached the end of its rate-cutting cycle, said Eric Robertsen, Global Head of Research and Chief Strategist at Standard Chartered, at a media roundtable on Tuesday.

Acknowledging that Pakistan’s macroeconomic indicators have improved with single-digit inflation and a rebuilding of foreign exchange reserves, Mr Robertsen noted that the country has been rewarded with credit rating upgrades. However, he warned that much of this progress has been driven by external factors.

“There has been excess liquidity in global markets, with central banks worldwide implementing more than 300 interest rate cuts over the past two years,” he said. “As a result, all major asset classes — equities, fixed income, credit, and even Bitcoin — have rallied, with oil being the exception.” This global environment, he added, has been favourable for Pakistan, but if global liquidity tightens, the country’s underlying vulnerabilities could resurface.

Commenting on the shifting global economic order, Mr Robertsen noted that the traditional model of emerging markets (EM) exporting manufactured goods to developed markets (DM) is evolving. A decade ago, EM-to-EM trade accounted for 40 per cent of global trade; today, that share has risen to nearly 50pc.

Strategist warns gains may fade as global conditions tighten

“Take China, for example,” he said. “Despite Chinese exports to the US falling by 30pc over the past 12 months, its overall export figures have remained stable year-on-year. Beijing has offset the decline by expanding trade with other countries, highlighting that the United States and Europe are no longer the sole engines of global growth.”

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Even so, he emphasised that the dollar’s strength still reigns supreme, dismissing talk of de-dollarisation. “There has been some diversification away from the dollar,” he explained, “but to call it an abandonment is an exaggeration. What’s actually happened is that global central bank portfolios have expanded. So while the dollar’s share has declined in percentage terms, the absolute amount of dollars they hold has actually increased.”

Published in Dawn, November 12th, 2025