Karachi: Economic analysts at AKD Securities Limited anticipate that the State Bank of Pakistan (SBP) will maintain its current policy rate in the upcoming Monetary Policy Committee meeting. This decision comes amid escalating tensions in the Middle East and rising oil prices, which have introduced new uncertainties into the region's economic landscape.

The ongoing conflict between Iran and Israel, exacerbated by recent warnings from former U.S. President Donald Trump towards Iran, has contributed to the uncertainty. These developments are expected to influence the SBP's cautious approach as it navigates the potential economic impacts.

According to AKD Securities, the recently announced budget is not expected to contribute to inflation, largely due to the absence of significant revenue-generating measures.

The economic advisory firm suggests that should regional tensions de-escalate and external financial inflows improve, the central bank may consider reducing interest rates to single digits by the year 2025. Such a move would be contingent upon a more stable macroeconomic environment.