Bank Indonesia is expected to hold its benchmark interest rate at 4.75% through 2026, according to a Reuters poll, as the conflict involving Iran introduces fresh inflation risks that complicate any path toward monetary easing. The central bank's rate has been steady, and the poll signals that external shocks, not domestic conditions alone, are now the dominant constraint on policy flexibility. The Iran conflict is flagged as a source of upward pressure on commodity and energy prices, which feed directly into Indonesian inflation and complicate the rupiah's stability. For Indonesia, a net commodity exporter with import dependencies in energy and consumer goods, sustained geopolitical disruption raises the cost of any premature rate cut. Investors and corporates pricing in rate relief through 2025 or early 2026 should recalibrate: the poll suggests the hold is durable, not transitional. The next inflection point will likely hinge on how oil markets and regional trade flows respond to the Iran situation in the months ahead.
Pakistan's economy grew 3.7 percent in FY2026, its fastest rate in four years, according to the Pakistan Economic Survey presented by Finance Minister Muhammad Aurangzeb. Growth beat last year's 3.18 percent but missed the 4.2 percent target, with floods, regional conflict, and weaker food exports cited as key drags.
The Union government released an additional Rs 1,09,019 crore in tax devolution to states on August 1, 2026, separate from the regular monthly transfer. The lump-sum release aims to accelerate state capital spending in the July-September quarter, with Uttar Pradesh, Bihar, and Madhya Pradesh among the top recipients.
US mortgage rates have risen to a one-year high as markets weigh Federal Reserve rate uncertainty and Middle East conflict-driven inflation fears. Higher rates increase monthly payments for new buyers and are likely to further suppress housing market activity and refinancing.
Pakistan's Sensitive Price Index rose 13.52 percent year on year for the week ending July 2, 2026, marking 45 consecutive weeks of annual gains. Electricity up 49 percent, wheat flour up 68 percent, and LPG up 44 percent year on year are the main drivers.
