Moody's reaffirms Pakistan's B3 rating, maintains stable outlook

ISLAMABAD: Moody's Investors Service has reaffirmed Pakistan's sovereign rating at B3 with stable outlook.

According to press statement issued here Thursday by Finance Ministry, the Pakistan's medium-term growth outlook has been categorized as strong in the backdrop of China Pakistan Economic Corridor addressing infrastructure and energy constraints and the continuing macrostability enhancing reforms initiated by the present Government.

The rating is supported by Pakistan's strong growth performance and its continued commitment towards reform implementation to reinforce fiscal and monetary discipline achieved over the last four years.

Moody's expects real GDP growth to rise towards 6% over the next few years as the country improves its competitiveness and continues its progress towards alleviating supply side bottlenecks.

Elimination of energy deficit, improved business productivity and resultant boost to exports is expected to provide impetus for a high growth trajectory, the statement added.

The outlook for growth is strong with stable macroeconomic indicators, discipline in fiscal and inflation management and maintenance of adequate foreign exchange reserves.

Moody's report acknowledges Pakistan's improved economic fundamentals and financial strength. While maintaining Pakistan's rating, Moody's highlights that Pakistan's debt profile and institutional strength has not witnessed any material change.

While underscoring the resilience of Pakistan's economy, Moody's indicates stalling of the Government's reform agenda including revenue reforms, any widening of fiscal deficit and weakening of external payments position as future risks to the economy.