Fitch affirms Pakistan’s prosperity, stable outlook

Ranks country at ‘B’, confirming progress
achieved by the present govt

ISLAMABAD: Fitch Ratings has affirmed Pakistan’s rating at ‘B’ with a ‘Stable’ outlook confirming the progress achieved by the present government under its economic reform agenda. Rating at B means prosperity.

Finance Minister Senator Ishaq Dar has welcomed reaffirmation of Pakistan’s credit rating by Fitch Ratings and stated that it was an acknowledgment of government’s economic policies.

Fitch has recognised that the country’s foreign exchange reserves have strengthened, fiscal deficit reduced and significant progress has been made on structural reforms. Fitch further acknowledged that the country’s economic outlook has brightened and looks promising in the current fiscal year on the back of agricultural recovery and an influx of investments under the China Pakistan Economic Corridor (CPEC). Around 5.3 percent growth is expected this year.

Fitch has predicted continued strong domestic demand, with private consumption and faster credit growth. Fitch also appreciated the performance of the banking sector and improvements shown across the IMF’s Financial Soundness Indicators wherein the percentage of non-performing loans has also fallen considerably.

Fitch predicted Pakistan’s debt-to-GDP ratio to gradually fall in the medium term as a result of continued fiscal consolidation. The report also highlighted reduction in general government budget, with revenues boosted by structural reforms, including the withdrawal of a number of tax concessions. The budget deficit has also been projected to continue narrowing gradually as the government remains committed to policy reforms. Fitch did not expect Pakistan to face external liquidity difficulties.