Far from safe

Fitch ratings, a global credit rating agency, acknowledged Pakistan’s economic recovery last week and highlighted positive developments, including a reduction in the policy rate, a drop in inflation, and stable exchange rates. Despite these improvements, the agency has warned that Pakistan still faces significant economic risks. The country must repay $22 billion in external debt during the fiscal year 2025, including $13 billion in bilateral deposits, which poses a considerable challenge. Moreover, securing external financing remains a concern, as Pakistan must continue to seek financial support from the International Monetary Fund, the World Bank, and friendly countries to avoid a financial crisis. Additionally, delays in structural reforms, such as the implementation of higher agricultural income taxes – a key condition set by the IMF – could impact future funding prospects. The government must continue implementing IMF-backed reforms to sustain investor confidence and avoid potential economic instability.

Seengar Ali Wassan

Khairpur Mirs