Pakistan is making steady progress in restoring economic stability

ISLAMABAD: International rating agency Fitch has said in its latest report that Pakistan is making continuous progress in restoring economic stability. According to the agency, there are signs of improvement in the country’s economy as a result of the reform measures taken by the government and the agreements with the International Monetary Fund (IMF).

According to the Fitch report, Pakistan has taken important decisions to reduce its fiscal deficit, stabilize foreign exchange reserves, and ensure transparency in economic policies. The agency says that due to these reforms, investor confidence is being restored, which has also seen an increase in foreign investment.

Effects of economic reforms and government policies

Fitch’s analysis said the Pakistani government has taken several key steps to revive the economy, including tax reforms, market-based revaluation of the rupee, subsidy cuts, and fiscal discipline. Thanks to these policies, the rate of inflation is expected to decrease, and the fiscal deficit is also coming under control.

Additionally, the government has also taken several measures to promote exports and reduce import costs, which has led to a reduction in the trade deficit. According to Fitch, consistent implementation of these reforms will be necessary to further improve Pakistan’s economy.

IMF programs and external financial assistance

In the report, the agreements made with the IMF have also been described as an important milestone in Pakistan’s economic recovery. In recent months, Pakistan has taken several tough decisions to meet IMF conditions, including increasing electricity and gas rates, improving tax collections, and enforcing fiscal discipline.

According to Fitch, further tranches from the IMF and support from other international financial institutions will help stabilize Pakistan’s foreign exchange reserves, which will stabilize the currency market.

Economic challenges and risks faced

Although there are signs of improvement in Pakistan’s economy, the report warns that the country still faces many challenges. High inflation, a rising debt burden, and political instability are factors that may affect the pace of economic recovery.

If the government maintains policy consistency in the coming months and investor confidence recovers further, Pakistan’s economy could be on a stable path, says Fitch. However, if the political situation is unstable or the reform process is hindered, this could have a negative impact on the economy.