Fitch affirms Pakistan's credit profile as B- with stable outlook

WASHINGTON: International credit rating agency, ‘Fitch’ has affirmed Pakistan’s sovereign credit rating at B- with a stable outlook.

In a statement, Fitch took note of the improved external resilience due to the policy actions taken by the government.

Going forward, Fitch forecast further narrowing of the current account deficit to 2.1 percent of GDP in FY20 and 1.9 percent in FY21, from 4.9 percent in the last fiscal year. The rating agency has also appreciated the adoption of a flexible exchange rate by the State Bank of Pakistan, Radio Pakistan reported.

According to Fitch, with the reform agenda on track as evident from the successful review of the arrangement with the IMF, the government is consolidating public finances though stronger revenue growth, broadening of tax base and increased documentation of the economy.

Fitch has also acknowledged improved fiscal discipline, ensured by the recently introduced Public Financial Management Act and the steps taken by the government to manage domestic debt risks following cessation of borrowing from the State Bank.

Read More: Moody’s changes outlook of five Pakistani banks to stable

Last year on December 5, the international rating agency Moody’s had changed outlook of five Pakistani banks to stable.

The Moody’s had kept the rating outlook of the banks unchanged to B-3. Earlier, the Moody’s had also changed Pakistan’s outlook to positive from negative in the light of steps taken by the PTI government to uplift the economy.

It had further said the Pakistani economy was improving and the biggest challenge being faced by the Pakistani economy, the current account deficit, was also shrinking.