NEW YORK: Moody’s Investors Service on Friday asserted that the credit profile of Pakistan has reflected the country’s “baa2” economic strength.
On its website, Moody’s Investors Service published that the periodic review of a group of countries, including Pakistan, reflected the country’s “baa2” economic strength which is underpinned by the robust long-term GDP growth potential and large scale of the economy, said the released statement.
In the report, Moody’s asserted that Pakistan’s “b2” institutions and governance strength that balances still weak executive institutions and fiscal policy credibility against a lengthening track record of effective checks and balances and judicial independence, as well as increasing monetary and macro-prudential policy effectiveness.
Read more: Moody’s maintains stable outlook for Pakistan’s banking sector
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.
