Global rating agency Fitch has issued a report on the Pakistani economy and said that Pakistan is making progress in restoring economic stability.
Fitch has said that Pakistan’s progress in structural reforms is important for its debt profile, progress on difficult reforms is key for IMF reviews, bilateral and multilateral financing.
The report further states that the State Bank’s interest rate cut of 12 percent is an argument for lower consumer inflation. Average inflation was 24 percent by June, which was slightly above 2 percent in January.
Fitch says that economic activities are improving due to stabilization and a reduction in interest rates. Economic growth is estimated to be 3 percent. The current account remained in surplus at $1.2 billion due to remittances, agricultural exports and tight monetary policy.
The international agency further stated that foreign exchange reserves are equivalent to 3 months of imports, these foreign exchange reserves are less than the financial requirement, with payments of $22 billion in fiscal year 2025.
The report states that there has been good progress at the economic level, the primary surplus was higher than the IMF target, tax revenue in the first half of the fiscal year was lower than the IMF target.
According to Fitch, the provinces have enacted legislation on agricultural income tax, increasing foreign exchange reserves and reducing external financing needs may be the reason for a positive rating in July, while the delay in the IMF review may be the reason for a negative rating.
