According to Fitch Rating Solutions, Pakistan’s GDP is expected to grow 4.2 percent in FY2021-22, up from 3.9 percent in FY2021.
The latest report from the rating agency states that an increase in vaccination rates will increase private consumption growth, while conditions that support monetary and fiscal policy will have a negative impact on gross fixed capital formation. Fitch Solutions said net exports are negatively affecting overall growth as imports are expected to outpace export growth.
He also noted that growth prospects may deteriorate as risk rise with time.
Domestically, given the more virulent Delta strain in the Community, amid a continuing decline in the proportion of fully vaccinated populations, a strong recurrence of Covid-19 infections could have a significant impact on growth.
Growing security threats posed by extremists such as the Taliban in Pakistan can lead to social instability and destruction of external infrastructure.
This can affect a country’s overall outlook for fixed capital and export potential when firms are reluctant to invest in capacity development infrastructure.
The report admitted Pakistan Economy’s resilience to COVID19 as it posted growth of 3.9% despite heavy COVID19 influence.
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