Moody’s Investors Service published, on its website, the periodic review of a group of countries, including Pakistan, and said that the credit profile of Pakistan (issuer rating B3) reflects the country’s “baa2” economic strength.
The credit profile of Pakistan (issuer rating B3) reflects the country’s “baa2” economic strength, which is underpinned by the robust long-term GDP growth potential and large scale of the economy, balanced against low per capita incomes and global competitiveness, said the released statement.
This latest published report does not issue any new ratings rather provide a review of the already designated credit rating and the respective economic factors surrounding the rating.
Moody’s said that Pakistan’s “b2” institutions and governance strength that balances still weak executive institutions and fiscal policy credibility and effectiveness against a lengthening track record of effective checks and balances and judicial independence, as well as increasing monetary and macro-prudential policy effectiveness.
The report added that the government’s “ca” fiscal strength is driven by its high government debt burden and narrow revenue base, which hinders debt affordability and reduces fiscal flexibility given ongoing infrastructure and social spending needs. Furthermore, the report added that the “b” susceptibility to event risk driven by the external vulnerability, as foreign-exchange reserve adequacy, though improving, remains low.