The international credit rating agency Fitch has cautioned that Pakistan’s ongoing political instability could jeopardize the country’s economic recovery.
In its latest Pakistan Country Risk Report, Fitch highlights the precarious state of the economy, noting that urban protests have significantly disrupted economic activities.
The report emphasizes the fragile political climate, pointing out that Pakistan Tehreek-e-Insaf (PTI) founder Imran Khan is likely to remain imprisoned despite several successful legal appeals. This situation would allow Pakistan to continue implementing IMF-mandated reforms, which are projected to help the economy grow by 3.5% in the fiscal year 2024-25.
The report also projects that the policy rate could reach 16% this fiscal year and decrease to 14% next year. The exchange rate has stabilized beyond expectations, with the dollar expected to reach Rs290 by the end of this year and Rs310 in 2025.
Furthermore, the rating agency warned that another potential flood or natural disaster could pose a significant threat to the already fragile economy.
