News Desk( B-trams ):The Ratings agency Fitch on Tuesday revised its outlook on Pakistan to negative from stable, citing deterioration in country’s external liquidity position and financing conditions since early 2022.
The agency said that the fiscal deficit is expected to increase to 7.5% of GDP in FY22, from 6.1% in FY21. Meanwhile, the current account deficit is estimated to reach USD 17 billion (4.6% of GDP) in the fiscal year ended June 2022 (FY22), driven by soaring global oil prices and a rise in non-oil imports boosted by strong private consumption.
Fitch affirmed Pakistan’s Long-Term Foreign-Currency Issuer Default Rating at B-. Standard & Poor’s credit rating for Pakistan stands at B- with stable outlook. Moody’s credit rating for Pakistan was last set at B3 with negative outlook.
While Pakistani rupee hit a fresh low of 221.5 per USD, pressured by political uncertainty surrounding the Punjab by-election results and the deteriorating domestic economic conditions.
In addition, Pakistan’s foreign exchange reserves continued to fall further amid persistent import-payment pressure and low remittances as the dollar continued its rally amid rate-hike expectations.
Meanwhile, country’s Finance Minister said that Pakistan is expected to get USD 4 billion from friendly countries in July, two days after the IMF signed a staff level agreement with the nation for disbursement of USD 1.17 billion loan