Economic Forecast by Fitch: Stability Predicted for PML-N Government in Pakistan
Economic Outlook and Political Forecasts in Pakistan
Fitch Ratings has forecasted that the current Pakistan Muslim League-Nawaz (PML-N) government will remain in power for another 18 months.
According to a report concerning Pakistan, Fitch also predicted that the founder chairman of Pakistan Tehreek-e-Insaf (PTI), Imran Khan, will remain under scrutiny in the near future.
Economic Challenges and Outlook
The report highlighted economic risks due to pressures from external payments for Pakistan’s economy. It suggested that inflationary pressures in Pakistan could potentially decrease by the end of the current fiscal year.
Fiscal Targets and Monetary Policy
Fitch’s report indicated that the Pakistani government has set ambitious fiscal targets in its budget and aims to reduce the fiscal deficit from 7.4% to 6.7%.
Expectations from the State Bank of Pakistan
It is expected that the State Bank of Pakistan (SBP) may lower interest rates by the end of the current fiscal year, possibly bringing the interest rate down to 14%.
Collaboration with International Financial Institutions
The report mentioned that Pakistan’s tough economic decisions align with the International Monetary Fund (IMF) program, aiming to streamline economic reforms in collaboration with the IMF.
Future Economic Reforms
Fitch’s report predicted that the current government will collaborate with the IMF to implement comprehensive economic reforms. If the current government ends, technocratic governance may emerge in Pakistan.
Political Developments and Social Implications
The report highlighted significant success for independent candidates in Pakistan’s February elections, with support from opposition parties against the ruling PTI. It also warned that protests in Pakistan’s cities could affect economic activities, citing flood and drought risks for Pakistan’s agriculture.
These insights from Fitch underscore the complex economic landscape and potential political shifts in Pakistan, impacting both local and international stakeholders.