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Moody’s report on Pakistan economy

Moody’s report on Pakistan economy

According to a report issued by international ratings agency, Moody’s Corporation, the China-Pakistan Economic Corridor (CPEC) will spur economic activities in Pakistan and has projected the economic growth at 4.9 percent during the current fiscal year. However, the report also cautions the worsening law and order situation in the country as suicide bombing suddenly increased in recent weeks. The country has been experiencing low economic growth for the last one decade but the corridor project is working as a driving force to boost economic activities and increase industrial production. The report hopes a strong banking system of the country will also help increase growth in next fiscal year. Another rating agency, Fitch Ratings, has also issued the ratings based on various factors at B with stable outlook. It claims that the three years extended facility programme of the International Monetary Fund has brightened the economic outlook of the country with pushing up the annual growth in gross domestic product up to 4.7 percent in the previous financial year from 3.7 percent in just two years ago. The IMF programme is regarded as the cause of broad gains despite low scores on the World Bank governance indicators and compounded security hazards. The independent sources project the growth at five percent for 2016-17.

The government expects around $4 billion foreign investment in three industrial zones to be established along the economic corridor. However, the country is facing dwindling cash flow from the expatriate Pakistanis from Gulf States and the rest of the world. But the middle class in the country is appearing as a new engine of growth. New housing societies have not only encouraged the real estate sector to spur business activities, but also pushed the industrial sector to work overtime to meet the demands of the housing sector. However, Fitch fears the current account deficit could further increase due to various unavoidable factors. Again the projects and plans related to the economic corridor will push the economic activities due invest from Chinese companies. As a matter of fact, the foreign media and rating agencies are reporting positive indicators of the country’s economy, but they also caution rising incidents of terrorism.

It is, therefore, imperative to take stern action against terrorists and their perpetrators. If the neighbouring countries such as India and Afghanistan are involved, the government must call a meeting of the foreign diplomats and present the proofs of Indian hand in terrorism activities in Pakistan. Unless the government starts taking relentless action against suicide bombers, the security situation will not be improved to satisfactory levels.