ISLAMABAD, June 18 -- Credit ratings agency Fitch Tuesday forecasted that Pakistan's inflation and interest costs will decline in tandem, with economic growth and primary surpluses driving government debt per gross domestic product (GDP) gradually lower.

The government's debt looks set to decline to 68 percent of GDP by the ongoing fiscal year which starts from July 2023 to June 2024, due to high inflation and deflator effects, offsetting soaring domestic interest costs, Fitch said in its report on Pakistan's recently presented budget for the next fiscal year.

The State Bank of Pakistan cut policy rates for the first time in five years on June 10, by 150 basis points to 20.5 percent.

"We now forecast fiscal year 2025 inflation at 12 percent, and the fiscal year 2025 policy rate at 16 percent", the report said.

  - Xinhua