Pakistan economy to grow by 4.2% in FY22: Fitch

Fitch expects imports to rebound more strongly than exports.

ISLAMABAD (Web Desk) – Pakistani economy is expected to record real GDP growth of 4.2% in FY2021-22 (July 2021-June 2022), up from 3.9% in FY21, says Fitch Solutions in its latest report.

The report noted that the pickup in the vaccination rate in recent months will likely reduce the possibility of extended lockdowns in the future. It also expects the economy to be buoyed by accommodative monetary and fiscal stances (public spending). A more assured economic outlook will bode well for consumption and investments, bolstering economic growth.

With regards to private consumption, Fitch Solutions has revised its forecast to grow by about 3.6% in FY22 compared to 3.4% previously.

Additionally, the report’s expectation for still strong remittance growth amid a stronger economic growth outlook in the Gulf Cooperation Council (GCC) economies and the European Union, will also support private consumption.

Fitch expects imports to rebound more strongly than exports. Imports will be supported by increased demand for vaccines with the government recently committing USD1.1bn to procure Covid-19 vaccines. Elevated fuel prices will further increase Pakistan’s imports bill.