Moody’s Investors Service – one of the three main global credit rating agencies – has upgraded the outlook for the Pakistani economy weeks after it took a contrary view of the Indian economy and downgraded the credit outlook to negative based on weakening macro-economic data.
In a big relief to Imran Khan’s government, investors may take a positive view towards the ailing Pakistani economy, as Moody’s Investors Service has changed country’s credit rating outlook from negative to stable.
“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”. said the agency.
“Such developments reduce external vulnerability risks, although foreign exchange reserve buffers remain low and will take time to rebuild”, it added
This is a big positive for Pakistan, as the decision may improve the foreign currency inflows into the country.
“Moody’s upgrades Pakistan’s outlook to #B3 ‘#Stable’ from ‘#Negative’.
The upgradation of outlook to ‘Stable’ is affirmation of Government’s
success in stabilising the country’s economy and laying a firm
foundation for robust long term growth”, Abdul Hafeez Shaikh, adviser to
the prime minister of Pakistan on finance and revenue, exulted after
the rating upgrade.
The announcement pushed Pakistan’s stock market above 40,000 points, which is highest after a gap of 10 months.
Earlier, on 7 November, Moody’s made a surprise announcement by trimming its rating outlook for India to “negative” from “stable”, citing increasing concerns that Asia’s third largest economy will grow at a slower pace than in the past.
Justifying the rating, Moody’s said the cut in the outlook “reflected government and policy ineffectiveness in addressing economic weakness, which has led to an increase in debt burden