Political and government liquidity risks remain elevated in Pakistan: Moody’s

0
181

KARACHI: Moody’s Investors Service, in a periodic review of ratings action, said the country’s credit profile reflects its “moderate (+) economic strength, which is underpinned by the relatively robust GDP growth potential and large scale of the economy, limited by very low per capita incomes and global competitiveness”.

One growth obstacle identified by Moody’s is Pakistan’s “very Low (+) institutional strength that takes into account very weak scores in the Worldwide Governance Indicators.” But it adds that greater central bank autonomy has increased monetary policy effectiveness in the country.

The rating agency also adds that Pakistan has “very Low (-) fiscal strength owing to its very narrow revenue base which hinders debt affordability, reduces fiscal flexibility and increases the debt burden given ongoing infrastructure spending needs and rising interest expense.”

It also adds that external pressures continue to weigh on the country’s foreign-exchange reserve adequacy.

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here