Key View

• We at Fitch Solutions have revised down our FY2021/22 (July 2021-June 2022) growth forecast for Pakistan to come in at 3.9%, having forecast 4.2% previously.
• We expect private consumption growth to weaken due to elevated inflation alongside an increase in sales levies, while growth in gross fixed capital formation will also soften

Key View

• Following the State Bank of Pakistan’s (SBP) December 14 meeting in which it hiked its key policy rate by 100bps to 9.75%, we at Fitch Solutions now expect a further 50bps worth of hikes, taking the policy rate to 10.25% by end-FY2021/22 (July-June), lower than our previous forecast of 11.0%.
• We continue to believe that the SBP will

Key View

• Following the State Bank of Pakistan’s November 19 meeting in which it hiked interest rates by 150bps to 8.75%, we at Fitch Solutions now expect a further 225bps of interest rate increases to 11.0% by end-FY2021/22 (July-June), compared to our previous forecast of 8.25%.
• This comes on the back of a widening current account deficit

Key View

• Pakistan’s rapidly growing chronic disease burden will present significant opportunities for medicine sales.
• However, we do not expect any significant investment from multinational drugmakers over the near-to-medium-term, with underlying weaknesses in the pharmaceutical sector weighing on innovative drugmaker's potential.
• As such

Key View

• We at Fitch Solutions view the Taliban’s takeover of Afghanistan as potentially problematic for Pakistan, entailing risks to both Pakistan’s security and economic future.
• Pakistan has long been viewed by the US as a country that has previously supported the Taliban and its extremist ideologies, and this backdrop could strain

Key View

• We expect Pakistan’s current account deficit to come in at 2.2% of GDP in FY2021/22 (July 2021-June 2022), up from 0.6% in FY20/21, as the trade deficit widens.
• Pakistan’s lacklustre ability to attract foreign direct investment inflows, alongside a slowdown in remittance flows, is unable to offset the country’s widening trade deficit

Key View

• Moves to kick-start private-sector investment in Pakistan's passive digital infrastructure market provide upsides to our long-term outlooks for mobile and wireline broadband expansion in the country.
• Multi-industry conglomerate Engro has pooled its nascent telecoms towers business into a new standalone unit and has announced a PKR21

Key View

• We at Fitch Solutions expect the State Bank of Pakistan (SBP) to maintain its benchmark policy rate at 7.0%, through FY2021/22 (July-June).
• With the economy’s recovery trajectory continuing to be bumpy amid the fourth wave of the Covid-19 outbreaks, alongside the country’s still low vaccination rate, we believe that the SBP will