"Unlocking Growth: The Ripple Effect of Declining Interest Rates on Cyclical Sectors"(Pakistan)
Declining interest rates can have several impacts on cyclical sectors of an economy: Increased Borrowing and Investment : Lower interest rates typically lead to cheaper borrowing costs for businesses. Cyclical sectors, which are sensitive to changes in economic conditions, often rely heavily on borrowing to fund expansion or investment in new projects. With lower interest rates, these sectors may see an increase in borrowing activity, leading to higher investment levels. Boost in Consumer Spending : Lower interest rates can also stimulate consumer spending. This is because consumers may have lower borrowing costs for mortgages, car loans, and other forms of credit. Cyclical sectors such as consumer discretionary goods and services may benefit from increased consumer spending as a result of lower interest rates. Housing Sector : The housing sector is highly cyclical and sensitive to interest rate changes. Declining interest rates can lead to lower mortgage rates, making home purchase