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IMF bailout to negatively impact Pakistan’s growth: Fitch

IMF bailout to negatively impact Pakistan’s growth: Fitch

ISLAMABAD: Pakistan’s economic growth will be negatively impacted in the short run due to tighter monetary and fiscal policies as a result of the International Monetary Fund’s bailout package, a leading economic research firm said in a report on Thursday.

Fitch Solutions, the macro research arm of global credit rating agency Fitch ratings, said they were revising their forecast for Pakistan’s real GDP growth for the outgoing fiscal year from 4.4% to 3.2%, and the upcoming fiscal year 2019-20 to come in at 2.7%, down from 4.0% previously.

Fitch noted that this was in lower than the forecasts by Bloomberg of 3.3% for the outgoing fiscal year and 3.5% for 2019-20.

“We believe that the bailout package from the International Monetary Fund (IMF) will see tighter monetary and fiscal policies in Pakistan, which will be negative for growth in the near term,” said Fitch Solutions in the report.

“That said, investment into the China-Pakistan Economic Corridor (CPEC) will continue to provide some support to the economy,” it added.