Pakistan's Economy Shows Signs of Recovery But High Debt Payments Remain a Concern
• Pakistan's economy shows signs of recovery, with increasing economic activity, stable exchange rate, and improvements in fiscal and external accounts.
• However, high interest payments remain a concern and may put pressure on expenditures.
• Inflation is expected to decline due to easing supply constraints and modest demand.
• Healthy revenue growth has reduced the fiscal deficit in Q1 FY2024 compared to last year.
• The positive economic outlook is attributed to sustained monetary policy, IMF program support, and high-frequency indicators showing improved economic activity.