In its report on Pakistan, Fitch, the credit rating agency, forecasts that Imran Khan, the founder of Pakistan Tehreek-e-Insaf (PTI), will remain in detention in the near future, and Pakistan's current Muslim League government will remain stable for the next 18 months.
According to Fitch, the inflation rate in Pakistan may decrease by the end of the current fiscal year, and the State Bank of Pakistan is expected to lower interest rates by the end of the fiscal year.
The Fitch report states that by the end of the current fiscal year, the State Bank is expected to bring the interest rate down to 14%. The government of Pakistan has set challenging economic targets in its budget, aiming to reduce the fiscal deficit from 7.4% to 6.7%.
According to the Fitch report, the difficult economic decisions made by the government of Pakistan are paving the way for the IMF program. External payment pressures are an economic risk for Pakistan's economy, while floods and droughts pose risks to Pakistan's agriculture.
Fitch notes that independent candidates achieved significant success in Pakistan's Feb 8 elections, with the winning independent candidates supported by the imprisoned PTI founder. Protests in Pakistan's cities could affect economic activities.
Fitch predicts that the PTI founder will remain in detention in the near future, and Pakistan's current Muslim League government will remain stable for 18 months.
Fitch further predicts that the current government will implement all economic reforms in collaboration with the IMF, and once the current government ends, a technocratic government will take over in Pakistan.