Fitch maintains Pakistan's B- rating with stable outlook: Hafeez Shaikh

ISLAMABAD: Adviser to Prime Minister Imran Khan on Finance Abdul Hafeez Shaikh on Monday said that the Fitch, one of the top credit rating agencies in the world, has maintained the B-negative (B-) rating of the country with a stable economic outlook, ARY NEWS reported.

He said that the rating from the Fitch was proof of a stable and effective financial management adopted by the incumbent government.

“It shows the growing confidence of the international institutions on economic policies of the country,” he said.

Hafeez Shaikh said that the government diverted its attention towards safeguarding public employment during coronavirus and it was due to these policies that the economy witnessed an improvement even during the pandemic.

It is pertinent to mention here that in January 2020, 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 forecasts 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 the 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.