Fitch Ratings, an American credit rating agency, stated in its report that Pakistan is likely to rely on the successful implementation of the International Monetary Fund (IMF) program and its government support in the coming years.
Elections are an important consideration, with over half of Fitch’s rated Asia Pacific (APAC) sovereigns, including Pakistan, holding elections in 2024.
Fitch noted that election results are more likely to influence credit profiles in countries such as Pakistan and Sri Lanka, both of which rely on IMF assistance.
The research indicated a slowing in reform momentum leading up to elections, with the incoming governments’ policy objectives potentially having an impact on credit profiles.
Additionally, Fitch noted that the election time could provide some volatility. The report also emphasized the Asia-Pacific region’s resilience in 2024, in the face of headwinds such as slowing global growth, high yields, geopolitical concerns, and continuous property-sector issues in China.
Fitch cited rating actions in 2023 as well, including a downgrading of Pakistan to ‘CCC-‘ in February and a subsequent upgrading to ‘CCC’ in July, both due to changes in its external finance outlook.
