KARACHI - More or less, higher oil prices had pushed Pakistan towards recession in 2008. By the same token, the fall in prices has now helped Pakistan back to its feet. On the back of easing global recessionary woes and supply cut by commodity producers, the commodity prices have recovered sharply from its multi-year low, as highlighted from the Commodity Research Bureau (CRB) index (up 20 percent from its low). However, the current international oil prices are consistent with the assumption of $54/bbl for next year. Hence, analysts at JS Research maintain forecast for C/A deficit at $6.3b, inflation at 8 percent and exchange rate at Rs80/US$ for financial year 2010. On equity market front, higher oil prices are positive for the E&P, oil marketing and refineries sectors. It is observed that global financial down turn had bottomed out with some large economies already able to put the recession behind them and looking forward to renewed growth. This can be reflected from the equity market prices which shot up 40 percent since the trough in March, according to FTSE All World ex Japan Index. Similarly, international commodity prices have also rallied from its multi-year low and recovered sharply from the bottom. The strong crude, base-metal and soft commodity prices have helped CRB recover 20pc from trough. On the back of close cooperation between fiscal and monetary authorities, analysts believe, the upside risk to commodity prices cannot be ruled out. This is extremely negative for Pakistan macros but positive for Pakistan equity markets in short-run. Higher CRB has a positive correlation with inflation and C/A (current account) deficit. However, stock market behaves positively in the short-run on commodity prices run but later negatively on the back of higher risk premia due to macroeconomic woes.