ISLAMABAD, JAN 13 (DNA) – 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. 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 of Pakistan. The country’s progress on business reforms, reflected in the country’s move from 136th to 108th in the World Bank’s latest Ease of Doing Business survey is also noted as a significant achievement.

Going forward, Fitch Ratings expects continuation of policies to further ease external account vulnerabilities, strengthening of fiscal consolidation and further improvement in business environment as key drivers for enhanced economic stability.