Moody’s raises Pakistan’s outlook to stable
Karachi, Pakistan – Moody’s Investors Service raised Pakistan’s credit rating outlook to stable from negative, citing the International Monetary Fund (IMF) programme that helped stabilise the economy.
The outlook was changed because of narrowing current account deficit, currency flexibility and lower external vulnerability risks, Moody’s said on Monday. The ratings company kept the credit assessment for the nation at B3, a junk rating.
The South Asian nation more than doubled interest rates and devalued its currency by half in the past two years helping stabilize the economy after a deficit blowout. The current account turned into a surplus in October for the first time in four years after the nation entered a US$6bn IMF bailout programme.
“This is big for the nation that has been dealing with an economic slowdown,” said Faisal Bilwani, head of international sales at Alfalah CLSA Securities. “Investor confidence is changing to positive.”
Moody’s expects the nation’s current account deficit to continue narrowing to average about 2.2 per cent of GDP in the current and next fiscal year compared with 5 per cent in fiscal 2019.