ISLAMABAD: Finance Minister Senator Mohammad Ishaq Dar Monday welcomed reaffirmation of Pakistan credit rating by Fitch Ratings and stated that it was an acknowledgment of government’s economic policies.
According to finance ministry’s press statement issued here, Fitch Ratings has affirmed Pakistan’s rating at ‘B’ with a ‘Stable’ outlook confirming the progress achieved by the present government under its economic reform agenda.
Fitch has recognized that the country’s foreign exchange reserves have strengthened, fiscal deficit reduced and significant progress has been made on structural reforms.
Fitch further acknowledged that the country’s economic outlook has brightened and looks promising in the current fiscal year on the back of agricultural recovery and an influx of investments under the China Pakistan Economic Corridor.
Fitch has fore casted continued strong domestic demand, with private consumption and faster credit growth.
Fitch also appreciated the performance of the banking sector and the improvements shown across IMF’s Financial Soundness Indicators wherein the percentage of non-performing loans has also fallen considerably.
Fitch forecasts Pakistan’s debt-to-GDP ratio to gradually fall in the medium term as a result of continued fiscal consolidation.
The report also highlighted the reduction in general government budget, with revenues boosted by structural reforms, including the withdrawal of a number of tax concessions.
The budget deficit has also been projected to continue narrowing gradually as the government remains committed to policy reforms.
Fitch does not expect Pakistan to face external liquidity difficulties as Pakistan demonstrated market access in October 2016 by issuing US dollars.