Business Environment Challenges To Inhibit Consumer Sector's Potential

Without a developed tourism sector and the presence of a formal food retailing sector to support demand for consumer goods, near-term growth in Pakistan's consumer-facing sectors is largely hinged on two factors, namely remittance inflows and food inflation. Although we expect remittance growth to moderate over the coming quarters due to external headwinds in developed markets such as the US and the UK, remittance inflows are likely to sustain its healthy growth momentum in the near future. On another positive note, inflationary pressures are losing steam in recent months, and this should prompt more consumers to loosen their rein over their purse strings. These positives should keep domestic demand well-supported over the coming months.

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