Pakistan’s Rebound Masks Deeper Problems Weighing on Economy

Pakistan’s Rebound Masks Deeper Problems Weighing on Economy Pakistan’s soaring stock market, record foreign reserves and improving credit ratings are signaling an economy on the mend. Beneath the surface, the recovery remains far less convincing. High energy costs and the war with Iran have pushed up inflation, while renewed militancy in Pakistan’s border provinces is adding to risks for investors. Last week, the central bank raised interest rates by 50 basis points to 12%, warning that the inflation outlook had deteriorated as oil topped $100 a barrel and wheat prices rose. On Monday, the government said inflation remained well above the central bank’s target rate last month.