Fitch Revises Pakistan Outlook to Negative

Web DeskJuly 19, 2022

Fitch expects the current account deficit to be $17 billion in FY22

The current account deficit expands owing to soaring oil prices and a rise in other commodities import bill

Current account deficit to be narrowed in FY23 to $10 billion

CAD to cut due to fiscal tightening, higher interest rates, and measures to limit energy consumption

Debt maturities in FY23 are about $21 billion

Maturities of about $9 billion are due to chiefly Saudi Arabia and China

Of this $5 billion in debt to commercial banks of China

The fiscal deficit might widen to 7,5% in FY22 or Rs 5 trillion

In FY21 fiscal deficit was around 6.1%

In FY23 fiscal deficit might narrow to 5.6% of GDP or Rs 4.6 trillion

Fitch expects a higher fiscal deficit of 1% from Govt estimates

The debt to GDP ratio might decline to 66% in FY23

Ratio to show downward trend helped by high inflation and modest primary deficit

Inflation averaged around 12.2% in FY22

Inflation in June accelerates to 21.3% on hikes in petrol and electricity prices

SBP forecast inflation of 18-20% in FY23

Fitch forecasts inflation to be 19% in FY23 and 8% in FY24

Economy to show growth of 3.5% in FY23

Slower growth will be due to monetary tightening, high imported inflation, and weaker external demand outlook

In FY22 economy grow by 6% from 5.7% in FY21

Largely due to the loosening of fiscal policy led by higher private consumption

Web DeskJuly 19, 2022