ISLAMABAD, JULY17: A concerning report regarding Pakistan’s current political instability that may impede economic recovery was provided by the American credit rating firm Fitch.
Fitch Business Monitor International emphasized the essential nature of Pakistan’s economic recovery in its most recent Country Risk Report, noting that political unrest will have an impact on economic activity, the political climate is unstable and former prime minister and founder of the Pakistan Tehreek-e-Insaaf (PTI), Imran Khan, is set to stay in prison despite judicial triumphs.
It stated that there are no urgent plans for new elections and that the coalition government led by the PML-N will stay in office for the next 18 months. In addition, Fitch raised the possibility that in the event of a change in government, a technocratic government would seize power.
This suggests that Pakistan will carry out the reforms required by the IMF, allowing the economy to expand by 3.2% in 2024–2025. While the exchange rate has steadied beyond forecasts, the analysis projects that the policy rate might reach 16 percent this fiscal year and 14 percent the next year.
According to the survey, USD is predicted to reach Rs 290 by the end of this year and Rs 310 the following year. The IMF program makes it difficult to meet budgetary targets, even though the fiscal deficit is predicted to drop from 7.4 percent to 6.7 percent, it said.Fitch also cautioned that the already precarious economy might be seriously threatened by another storm or natural disaster.
