Fitch forecasts a policy rate hike of only 25 basis points, from the current 7.0%, during fiscal year 2022. They foresee inflation to be the core risk as inflationary pressures could prove more persistent, particularly given a negative real policy rate, which could prompt a higher degree of tightening by the SBP.
Inflationary pressures have re-emerged with the CPI reaching 11.1% year on year during the month of April. Fitch expect inflation to ease to an average of 8.3% over FY22, from an average of 9.0% in FY21, as the temporary rise in food prices subsides, and the rise in oil prices moderates.
Source:
FitchRatings
