Last Updated on: 7th July 2023, 12:56 pm
Pakistan’s credit profile (B3 issuer rating) reflects the country’s “baa2” strength, backed by strong long-term GDP growth potential and the large size of the economy with low per capita income and global competitiveness, says Moody’s Investor Service (Moody’s).
Moody’s completed its periodic review of a group of issuers that includes Pakistan and possibly related ratings through a discussion on May 17, 2021.
No rating committee was involved in the review and no rating action is announced in this release. Credit rating and is not an indication of whether a credit rating measure is likely in the near future.
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The credit rating and/or the outlook status cannot be changed in a portfolio review and are therefore not affected by this announcement.
Moody’s reviews all of its ratings on a regular basis in accordance with regulations, either annually or semi-annually for governments and certain supranational organizations based in the EU.
This periodic review is not related to the requirement of specific calendar dates on which the EU and some other rating actions for states and sub-states can take place.
Moodys conducts these periodic reviews through portfolio reviews, which re-assess the adequacy of any outstanding rating in the context of the relevant primary methodology (s), recent developments, and a comparison of the financial and operational profile with similarly rated peers.
Moody’s stated that Pakistan’s credit profile (B3 issuer rating) reflects the country’s economic strength “baa2”, backed by strong long-term GDP growth potential and the large size of the economy with low per capita income and global competitiveness. ; its “b2” institutions and the strength of governance, which reconciles persistently weak executive institutions and the credibility and effectiveness of fiscal policy with a growing number of effective controls and balances, and the independence of the judiciary, and increased monetary and macroprudential effectiveness of the policy.
The government’s “ca” fiscal strength due to high public debt burdens and tight revenue bases, which hinder debt affordability and reduce fiscal flexibility in the face of continuing infrastructure and social spending needs; and its susceptibility to risk events due to external vulnerability, as the adequacy of foreign exchange reserves, while improving, is still low compared to its peers.
This document summarizes Moody’s position as of the date of publication and will not be updated until the next announcement of a periodic review showing material changes in the credit situation (if any) during the interim period.
