The International credit rating agency Fitch has issued a warning that the credit ratings of five Asian countries, including Pakistan, will be affected.
According to rating agency Fitch, a possible drop in remittances from overseas workers and the consequent need for more external financing in the second half of 2020 could affect credit ratings.
According to a report released by Fitch, the highest remittances in June and July were due to temporary factors. COVID-19 is expected to reduce the remittances due to the loss of many jobs abroad, declining incomes, and the global oil price crisis.
Fitch estimates that apart from Pakistan, remittances for Bangladesh, Sri Lanka, India, and the Philippines will decline by an average of 12% per annum. This estimate is 8% lower than the estimates of the World Bank and the Asian Development Bank. Foreign Remittances are the major chunk of cash inflow in Asian countries like Pakistan, India, Bangladesh, Sri Lanka, Nepal, and others, the deteriorating remittances of all these countries due to COVID-19 could seriously affect their credit rating.