Fitch Ratings Forecasts 12% Inflation in Pakistan for Next Financial Year

Islamabad: Fitch Ratings has projected a 12% inflation rate for Pakistan in the upcoming financial year.

The recent budget is expected to strengthen Pakistan’s relationship with the International Monetary Fund (IMF), though achieving financial targets remains uncertain.

Fitch Ratings suggested that government measures could ease external payment pressures, but economic growth is anticipated to be lower than anticipated, with a projected rate of 3% for the next fiscal year.

Improvements in external payments since the elections have contributed to a more positive economic outlook. The ratings agency highlighted that fiscal discipline embedded in the budget could reduce the fiscal deficit. The trade deficit is expected to narrow to between 0-3% of GDP, compared to 1% last year.

Furthermore, enhancements in the foreign exchange system have boosted remittances, while improved agricultural exports have also bolstered the economic landscape.

Fitch also acknowledged the potential for Pakistan to roll over some debts in the next budget, which could provide additional relief to the country’s financial position.