In a recent analysis, Fitch Ratings has provided a forecast on the political and economic landscape of Pakistan. The credit rating agency anticipates that Imran Khan, the founder of Pakistan Tehreek-e-Insaf (PTI), will remain in detention for the foreseeable future, while the current Muslim League government is expected to maintain stability for the next 18 months.
Fitch’s report suggests a potential decrease in Pakistan’s inflation rate by the end of the fiscal year, with the State Bank of Pakistan likely to reduce interest rates to 14%. The government has set ambitious economic goals, aiming to narrow the fiscal deficit from 7.4% to 6.7%.
The agency highlights that Pakistan’s difficult economic decisions are facilitating the progress of the International Monetary Fund (IMF) program. However, it also points out the risks posed by external payment pressures and the threats to agriculture from floods and droughts.
The report also notes the significant success of independent candidates in the February 8 elections, many of whom were backed by the detained PTI leader. Fitch warns that ongoing protests in Pakistan’s cities could disrupt economic activities.
Looking ahead, Fitch predicts that the current government will collaborate with the IMF to implement all necessary economic reforms. Upon the completion of the current government’s term, a technocratic government is expected to take over in Pakistan.
In addition, Fitch underscores the importance of political stability in ensuring economic progress. The report suggests that the government’s ability to manage public dissent and maintain order will be crucial in achieving its economic targets and sustaining investor confidence.
Moreover, Fitch emphasizes the role of international cooperation in Pakistan’s economic recovery. The agency believes that continued support from global financial institutions and neighboring countries will be vital in addressing Pakistan’s economic challenges and fostering long-term stability.