ISLAMABAD: Acting Assistant Secretary of State for the Bureau of South and Central Asian Affairs Alice Wells on Wednesday appreciated “bold economic reforms” formulated and implemented by the Pakistan’s foreign ministry to “boost growth, attract private capital, and expand exports” while welcoming welcomed Moody’s revision in Pakistan’s credit outlook from negative to stable.
In a tweet shared by the State Department, Asia Wells stated: “Pleased to see that [Moody’s Service] has revised Pakistan’s credit outlook to stable thanks to [Pakistan’s Finance Ministry] reform efforts and IMF program. With bold economic reforms, Pakistan can boost growth, attract private capital, and expand exports.”
New York-based credit rating agency Moody’s on Monday raised Pakistan’s economic outlook from negative to stable on the back of the country’s reforms supported by an IMF programme, but kept its credit rating unchanged at B3.
The ratings firm said improvements in the balance of payments was a primary driver of the rating action, but added that foreign exchange buffers would still take time to rebuild.
Moody’s Investors Service (“Moody’s”) on Monday affirmed Pakistan’s local and foreign currency long-term issuer and senior unsecured debt ratings at B3 and changed the outlook to stable from negative.
According to a report issued by the bond credit rating business of Moody’s Corporation, “the change in outlook to stable is driven by Moody’s expectations that the balance of payments dynamics will continue to improve, supported by policy adjustments and currency flexibility.”
It further stated, “Such developments reduce external vulnerability risks, although foreign exchange reserve buffers remain low and will take time to rebuild. Moreover, while fiscal strength has weakened with higher debt levels largely as a result of currency depreciation, ongoing fiscal reforms, including through the country’s International Monetary Fund (IMF) programme, will mitigate risks related to debt sustainability and government liquidity.”