Fitch Ratings has forecast an inflation rate of 12% for Pakistan in the coming fiscal year.
According to Fitch, the latest budget will further strengthen Pakistan’s agreement with the International Monetary Fund (IMF), but it is still unclear whether its financial targets will be met in the coming fiscal year.
Fitch Ratings suggests that government measures may ease the pressure on external payments. However, economic growth is expected to be weaker than expected with a growth rate of 3% for the next fiscal year.
Conditions and foreign payments have improved since the general election, which has led to a more favorable economic outlook.
The rating agency said the fiscal deficit could be reduced through economic discipline included in the budget. The gap between exports and imports is expected to narrow between 0-3% of GDP. Last year, the difference was 1% of GDP.
In addition, the improvement in the exchange rate has had a positive effect on remittances and agricultural exports have improved the economic situation.
Fitch also noted that some of Pakistan’s debts could be repaid in the next budget, which would ease the country’s finances.
