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ISLAMABAD: Standard & Poor’s (S&P) rating agency has affirmed Pakistan’s sovereign rating and maintained the ‘stable’ long-term outlook.
The New York-based rating agency affirmed the ‘B-’ long-term and ‘B’ short-term sovereign rating, along with ‘B-’ long-term issue rating senior unsecured debt and sukuk trust certificates. It said the country’s rating remains constrained by a narrow tax base and domestic and high external security risks.
It added that although the security situation has gradually improved over recent years, the ongoing vulnerabilities weaken the government’s effectiveness and weigh on the business climate. It said the pandemic exacerbated Pakistan’s economic downturn but forecast the real GDP to recover to 1.3 percent during the current fiscal year.
The agency noted that the government had made solid progress toward important fiscal and economic reforms prior to the start of the global coronavirus outbreak, hoping the upward progress should return once the pandemic was contained.
It said the stable outlook reflected rating agency’s expectations that funding from the International Monetary Fund (IMF) and other partners, along with a recent improvement in Pakistan’s balance of payments position will be sufficient for the country to meet its considerable external obligations over the next 12 months.
READ MORE: Fitch affirms Pakistan’s ratings with stable outlook