The current economic instability and high inflation in Pakistan have kept everyone on edge. With the rupee consistently falling in value, people are scrambling to invest their hard-earned money and preserve its value.
If you’re planning to invest your money but aren’t sure how to go about it, this blog is for you. We have compiled a list of profitable avenues you can explore to ensure you receive the best returns. We know you’re excited to start investing, so let’s dive right into the topic.
But first, let’s discuss a few essential basics.
Pakistan is not the only one facing the challenges of inflation. Countries across the globe are battling soaring prices. Most are suffering the after-effects of economic slowdowns initiated by Covid, followed by the rising cost of oil and gas due to the Ukraine war.
But in Pakistan, the situation worsened after floods destroyed the supply of crops, amplifying the price of essential consumer items by nearly 45% in just one year.
Other reasons behind the current spike in inflation include the recent devaluation of the Pakistani rupee against the US dollar, IMF agreements, and a growing budget deficit.
With these factors collaborating to push up prices, it’s important to consider securing your earnings in safe investment opportunities.
Inflation decreases a person’s purchasing power. That means it costs more money to buy the same goods. In order to maintain your current standard of living, you will need to explore additional avenues of revenue.
Since money sitting in the bank account offers no returns and continues to depreciate in value, investing is a great way to hedge against inflation. So yes, inflation and investment are closely tied together. Investing in the right assets can hedge against inflation and help retain the value of your money, even when the market is volatile. So taking the right steps today as you face rising inflation in Pakistan can ensure a safer tomorrow.
Let’s look at some ways you can safeguard your money.
The demand for real estate has grown over the past decade since the government offered incentives, tax credits, and subsidiaries to strengthen the economy.
In fact, real estate is now an all-time favorite investment option in Pakistan. This is due to several reasons. First, as inflation increases, so does the value of the property. So your money is protected from devaluation. Secondly, prices are less volatile in the real estate sector, so investments are more secure. And finally, renting out real estate properties offers a source of additional income.
Several development projects are underway to meet this rise in demand for real estate.
So how can you find the best real estate investment in Pakistan?
Keep the following points in mind:
If you’re looking for real estate properties to invest in, consider Chapal Builders. They have a variety of projects to cater to your needs.
For instance, Chapal Grande Vista is one of the many apartment complexes they have recently launched. It has 3,4, and 5 rooms apartments, so you can book a flat on easy installments depending upon your income/savings. The project provides modern amenities, including CCTV, high-speed elevators, standby generators, recreational facilities, etc.
However, if you want to up your investment level, you can consider booking a villa in their premium project Chapal Luxury Villas. Your property is nestled safely inside a gated community with countless facilities, such as a developed commercial area, school, hospital, mosque, community center, cricket grounds, and more.
Investing in commercial real estate is another great way to preserve your earnings during high inflation. This asset class is a good option for two reasons. Firstly, like residential real estate, your commercial property will increase in value proportionately with inflation. And secondly, it can be rented out to generate additional cash flows. So as the cost of living rises, underlying leases can also raise rents to offer reliable returns on investment.
There are countless commercial real estate investment opportunities across Pakistan. For instance, besides residential properties, Chapal Builders also offers commercial investment options. They offer affordable shops in Navinta Mall in the prime location of Saddar, the most popular shopping hub of Karachi. So investing in this centrally-located, flourishing business district means your commercial property has a greater chance of appreciating in value.
God is another good investment option for Pakistanis. It has a long history of great holding value. So while local currency continues to depreciate, this precious metal has consistently seen a rise in value, especially during times of economic crises.
So a smart choice is to invest in gold bars, coins, or jewelry.
The Pakistani rupee continues to lose its value in the global economy. This means holding money in the local currency is not a good option in this volatile, inflationary economy. So convert your savings into a stronger foreign currency, such as the US dollar, UAE dirham, UK pound, or Euro.
So which currency should you invest in?
The answer is simple – any currency of a country that is economically stable and trading strongly. Start by studying the forex trends of the currency you want to purchase and invest accordingly. It may be wiser to invest in a variety of foreign currencies.
Investing in the Pakistan Stock Exchange Market is another way to hedge against inflation. Yes, the price of shares can fluctuate, and there will be some bad times.
But the secret is to invest in shares of companies that will be in business for a long time. Pick sector segments that are performing well in the short term and watch the markets. There are bound to be good stocks even during bad times.
Besides gold, foreign currency, and real estate investment, Pakistan offers numerous other equally safe options, such as mutual funds. A mutual fund is a portfolio of investment assets, such as stocks, bonds, and other securities.
Professionals help manage your money by investing in multiple investment options. Moreover, mutual funds are highly liquid investments, meaning they can be easily bought and sold. So even if you have a small amount of money, your mutual fund advisor can generate a good ROI.
My advice is always to hang on to some cash. There is a degree of uncertainty in Pakistan’s economy. So you should have enough liquid assets to manage your expenses, even if the going gets tough down the road.
High inflation is slowing down the economy. Unfortunately, with rising energy prices, tighter IMF conditions, and the depreciating rupee, the rate of inflation will not slow any time soon.
One way to manage the impacts of high inflation in Pakistan is to diversify your investment portfolio. Consider spreading your money across various types of assets, such as real estate, gold, and foreign currency. This helps mitigate market risks and hedge against inflation.
If you’re thinking of a real estate investment in Karachi, consider associating yourself with Chapal Builders. They’re renowned builders who have been developing projects since 1968. Investing in their premium properties at affordable installments means your money is in safe hands. More importantly, you can expect a good return on your investment.
It’s time you invest in real estate and secure a better future.