KARACHI - Pakistans exchange rate has stabilized and its foreign exchange reserves, which dipped low last year triggering balance of payments problems, are climbing. This was stated by Dr Norbert Walter, Chief Economist for Deutsche Bank Group and Chief Executive Officer of Deutsche Bank Research. He stated that while slow domestic and external demand will continues to affect the countrys economic growth prospects, the USD7.6 billion Stand-By Arrangement agreed with the International Monetary Fund in November last year, combined with the additional USD3.2 billion loan it confirmed in August this year, will help the country address increased balance of payment needs and provide some relief in stabilizing Pakistans economy, Dr Walter said. With multilateral and bilateral support coming through, the country could receive the assistance it needs to sustain security and a more robust economy, he said. Dr Walter made his comments in Pakistan as part of a series of briefings across the Asian region about the global economy and the market fundamentals that will determine future growth in Asia and its emerging markets. In Pakistan, Dr Walter briefed Deutsche Banks key corporate clients, regulators, educational institutions and stakeholders, including the Governor of the State Bank of Pakistan Syed Salim Raza. Dr Walter said he believed the global economy had almost bottomed, with global gross domestic product for 2009 expected to decline by approximately 3pc. 'We forecast that the global economy will post annual growth of between 1 per cent and 1.5pc in 2010 following a contraction in 2009 an indication of modest recovery in the second half of the year, Dr Walter said. 'Our research also suggests that strong fundamentals and recovery signs out of Asia - particularly from China, India and Indonesia - will provide support to world economic growth next year. While global trade volumes were likely to contract by 10 per cent to 15 per cent this year, signs of recovery would kick in during 2010 with the first signals of an uptick expected in the manufacturing sector, Dr Walter said. 'Our analysis also suggests that world wide inflation has come down to almost zero, which is in line with the increasing output gap. Inflation after 2012 depends on how central banks design and manage the exiting of their zero interest rate policies, he said. Shazad Dada, Chief Country Officer and Head of Global Banking for Deutsche Bank Pakistan, said clients are facing unprecedented economic challenges world wide. The pace at which markets have been changing has meant that we continue to commit resources and leverage on our global research platform to ensure that our clients have necessary access to market information and solutions to navigate through these difficult times, Mr. Dada said. Deutsche Bank Pakistan ranks among the top foreign banks in the country, providing innovative financial products and solutions to multinationals, large local corporates and foreign investors through branches in Karachi, Lahore and Islamabad.