June 3, 2022
1 min read

Moody’s downgrades Pakistan’s outlook from stable to negative 

It added that the country’s “weak institutions and governance strength” had added uncertainty around the future direction of macroeconomic policy…reports Asian Lite News

Moody’s Investor Service on Thursday downgraded Pakistan’s outlook from stable to negative, citing “heightened external vulnerability” and uncertainty around securing external financing to meet the country’s needs.

“The decision to change the outlook to negative is driven by Pakistan’s heightened external vulnerability risk and uncertainty around the sovereign’s ability to secure additional external financing to meet its needs.

Moody’s assesses that Pakistan’s external vulnerability risk has been amplified by rising inflation, which puts downward pressure on the current account, the currency and � already thin � foreign exchange reserves, especially in the context of heightened political and social risk,” the statement said.

It added that the country’s “weak institutions and governance strength” had added uncertainty around the future direction of macroeconomic policy, including whether Pakistan would complete the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) programme and maintain a credible policy path that supports further financing, Dawn reported.

Explaining the decision to affirm the B3 rating, Moody’s said it assumed that Pakistan would conclude its seventh review under the IMF EFF programme by the second half of this calendar year and would maintain its engagement with the Fund, leading to additional financing from other bilateral and multilateral partners.

“Moody’s assesses that Pakistan will be able to close its financing gap for the next couple of years. The B3 rating also incorporates Moody’s assessment of the scale of Pakistan’s economy and robust growth potential, which will provide the economy with some capacity to absorb shocks.

“These credit strengths are balanced against Pakistan’s fragile external payments position, weak governance and very weak fiscal strength, including very weak debt affordability,” the statement said.

ALSO READ: Taliban ready to mediate between Pakistan, TTP

Previous Story

Expo 2020 celebrates success after receiving 29 Global Telly Awards

Next Story

Imran says Pakistan will split into three, Shehbaz hits back

Latest from -Top News

Canada Breaks Silence, Eyes Palestine Recognition

The move follows similar announcements by France, which said it will recognize a Palestinian state in September, and the UK….reports Asian Lite News Canadian Prime Minister Mark Carney announced on Wednesday that

Balochistan not for sale, Trump told

Mir Yar Baloch asserted that Trump’s recognition of the oil and mineral reserves in the region is “indeed accurate.”…reports Asian Lite News Just after US President Donald Trump announced to help Pakistan

Myanmar Unveils New Govt

The union government is led by U Nyo Saw as Prime Minister, and the State Security and Peace Commission is chaired by Senior General Min Aung Hlaing…reports Asian Lite news Myanmar’s National

Rain in Tibet trigger flood in Nepal

Warnings issued in Rasuwa, Dhading and Nuwakot; fears mount after glacial breach, rising rivers, and twin tremors rock Himalayas A deluge of rainfall in southern Tibet early Wednesday has sent alarm bells

China pledges $12.6b to families

China rolls out a nationwide childcare subsidy scheme, easing burdens on young families with digital access, inclusive coverage, and strong financial backing from the central government. In a sweeping move to encourage
Go toTop

Don't Miss

Pakistan struggles to balance security and friendship with China

Some reports suggest that Islamabad is indirectly pressuring Beijing to

Karachi Grapples with Crime Surge

2025 is turning out to be no different than 2024