Pakistan's cement industry’s bottom line may improve in FY23-24

AHL Research has released a positive forecast for Pakistan’s cement industry performance in FY23-24. The analyst estimates that cement demand is expected to recover in FY23-24 due to a significant decline in coal prices, energy efficiencies and higher retention prices, which should stimulate the bottom line.

In addition, the IMF programme provided much-needed clarity and assurance concerning the economic plan for the next nine months with US$3bn in three instalments of which the first tranche has been released recently. The country’s foreign reserves were down due to a trade imbalance, political unrest, slow growth, high inflation, and the government banning unnecessary imports. 

Following the financial cooperation of Saudi Arabia, China and UAE and other donors, Pakistan's economic situation is improving. As a result, external sector pressure is expected to decrease. State Bank (SBP) reserves are expected to reach US$10.6bn by FY23-24.

Inflation is forecast to average around 21 per cent in FY23-24 and monetary easing is expected to start by 2HFY23-24. With the election around the corner, the new government is expected to take major structural reforms with the bigger IMF programme.