S&P Raises Pakistan’s Credit Rating, Says Economy is More Stable Now

Standard and Poor has revised Pakistan’s long-term credit rating from B negative to B today and said that country’s better policy making has impacted national economy’s performance and growth positively.

S&P said that Pakistan’s democratically elected government has helped country’s economic stability, thanks to reform program that government initiated.

It affirmed the ‘B’ short-term rating and said the outlook on the long-term rating was stable.

Agency, on other hands, warned that Pakistan’s structural weaknesses continue to exist, such as narrow tax base and security risks, which must be fixed for long-term stability.

It said that current infrastructure and taxing regime has effected negatively on the business climate.

S&P Forecast:

  • Pakistan’s GDP per capita to be US$1,500 in 2016
  • Average annual GDP growth estimated to be 5% over 2016-2019, up from earlier estimate of 4.7%
  • Pakistan’s gross general government debt to fall below 60% of GDP by 2018

“Notwithstanding the recent terrorist attacks in Quetta, however, we see even these structural weaknesses as having improved over the past few years. Combined, these factors motivated the upgrade,” it said in a statement.

The agency forecasts average annual GDP growth to 5.5 per cent in the next three years from the current growth rate of 4.7 per cent.

“This revision reflects improved construction and services sector activity, low-cost oil and finance, and high investment associated with the China-Pakistan Economic Corridor (CPEC)”, concluded the report.

  • Any one can know the reliability of these credit rating agencies if one study a little about 2008 financial crisis. These only serve a special purpose to their masters not the real truth.The truth is that Pakistan is fulfilling debt servicing in a fine way and that is why they want to lend more so that almost all of your budget go to paying the loans and interest.
    Country’s better policy only means to their eyes that how good they have been paying back the loans and nothing else.

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