ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh on Monday announced that Moody’s Investors Service, an American credit rating agency, has upgraded Pakistan’s outlook from ‘Negative’ to ‘Stable’.
“Moody’s upgrades Pakistan’s outlook to B3 ‘Stable’ from ‘Negative’. The upgradation of outlook to Stable is affirmation of the government’s success in stabilising the country’s economy and laying a firm foundation for robust long term growth,” Abdul Hafeez Shaikh tweeted.
“The change in outlook to stable is driven by Moody’s expectations that the balance of payments dynamics will continue to improve, supported by policy adjustments and currency flexibility. Such developments reduce external vulnerability risks, although foreign exchange reserve buffers remain low and will take time to rebuild. Moreover, while fiscal strength has weakened with higher debt levels largely as a result of currency depreciation, ongoing fiscal reforms, including through the country’s International Monetary Fund (IMF) programme, will mitigate risks related to debt sustainability and government liquidity.
“The rating affirmation reflects Pakistan’s relatively large economy and robust long-term growth potential, coupled with ongoing institutional enhancements that raise policy credibility and effectiveness, albeit from a low starting point. These credit strengths are balanced against structural constraints to economic and export competitiveness, the government’s low revenue generation capacity that weakens debt affordability, fiscal strength that will remain weak over the foreseeable future, as well as political and still-material external vulnerability risks,” read a press release issued by Moody’s.