Economic growth in Pakistan for fiscal year 2022/23 will be negative at 0.3%, The Express Tribune reported on February 2, citing data from international financial think tank Fitch Solutions.
Fitch analysts are reportedly confident that Pakistan’s national currency will continue to fall, reflecting their forecasts in the report “A Quick Look: Pakistani Rupee May Weaker Further”.
“That [девальвация рупии] could exacerbate inflationary pressures on imports and could eventually lead to a steeper rise in the key rate of the State Bank of Pakistan.”— quotes the agency said in the report.
Therefore, the combination of the rupee’s depreciation against the US dollar, as well as inflationary risks, may lead to negative economic growth in 2023, Fitch analysts conclude.
Remember, on January 31, the IMF released an updated report in which it lowered its forecast for Pakistan’s economic growth in the 2023 (calendar) year from 3.5% to 2%.
Note that according to official statistics, inflation in Pakistan at the end of January 2023 was 27.6% per year.
Pakistan is currently negotiating with the IMF for an emergency extension of a $1 billion (70 billion rubles) loan assistance program. At the same time, in order to meet the requirements of the fund, the government has already issued another increase in fuel prices by 35 rupees (15 rubles) per liter, that is, more than 15% of the increase, and also launched the exchange rate of the rupee in a free market “float”, which led to a fall in the exchange rate against the dollar by 14.2% over four business days.
Source: Rossa Primavera
I am Michael Melvin, an experienced news writer with a passion for uncovering stories and bringing them to the public. I have been working in the news industry for over five years now, and my work has been published on multiple websites. As an author at 24 News Reporters, I cover world section of current events stories that are both informative and captivating to read.