Federal Minister for Planning, Development, Reforms and Special Initiatives, Asad Umar has said that assigning of ‘stable’ outlook to Pakistan by Moody’s Investor Services is a ‘testimony’ to the country’s ‘V-shaped’ recovery in COVID-19 outbreak.
On a social media website twitter today Asad Umar said, “Moody’s reconfirmed Pakistan’s credit rating with a stable outlook”. In the middle of a global pandemic it is a testimony to the V-shaped recovery Pakistan has seen with PM Imran Khan’s balanced approach to safeguarding national health & livelihoods, delivering success on both counts,” he added.
On Saturday, Moody’s Investors Service confirmed Pakistan’s B3 credit rating with the outlook at stable, as it concludes the review for downgrade initiated on 14 May 2020.
The stable outlook reflects Moody’s view that the pressures Pakistan faces in the wake of the COVID-19 shock and prospects for its credit metrics, in general, are likely to remain consistent with the current rating level, the rating agency said.
The rating agency said that it expects Pakistan’s economic growth to be positive in fiscal 2021 (ending June 2021) from a recession in fiscal 2020, but still low at around 1-2%.
“While Pakistan’s economy is relatively closed with low reliance on exports, movement restrictions due to COVID-19 will keep economic activity below the pre-outbreak levels for some time,” it added.
The slow economic recovery will weigh on government revenue, keeping the fiscal deficit wide at around 8-8.5% of GDP in fiscal 2021 under Moody’s projections, at similar levels compared to the fiscal year. The risks to the economy and government finances are to the downside, particularly if more stringent measures are implemented to curb the spread of the virus domestically.