Fitch report fears slide in Pakistan’s growth rate, exports

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KARACHI: The global credit rating agency Fitch has said that inflation and the interest rate will not hike further in the next few months in Pakistan.

In its report on the economy of Pakistan, Fitch Solutions predicted down-slide in growth rate and exports. The growth rate this year will will be around 4.4 percent, the report said.

According to the report, Pakistan’s economy is faced with growing challenges that will adversely hit the life of the common man. The CPI-based inflation reached a four-year high at 6.78 per cent in Oct, 2018 before easing to 6.2pc in December.

The report also said that the rising inflation has come on the back of depreciation in the Rupee against the US dollar during last year along with high international oil prices during the first half of 2018.

The rating agency said that the austerity measures and cut in expenditure will prove very difficult for the government.

The report said that the PTI government has had to backtrack on its campaign promises of never going to the International Monetary Fund (IMF) or seek financial help from other countries after the prime minister had to personally visit friendly countries to gather funds in order to avoid a potential default on its liabilities.

The report said that in the first quarter of the current financial year, the expenses have soared by 14 percent, while the volume of the budget deficit has increased to 541.7 billion.

The report also said that the inexpensive crude oil would have lesser impact amid the fears of downturn in the global economy.

The report mentions that, “a strengthening relationship with an increasingly outward looking China has likely emboldened Pakistan, but the government is also wary of overreliance on China, and still depends on the US for military aid as well as looking towards the IMF for a bailout package.”

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