No-trust move: Moody's concerned for Pakistan's economy – The Express Tribune

FM Qureshi urges int’l community to provide assistance to Afghanistan
State Bank grants Careem Pay IPA for EMI license
Home
Latest
Pakistan
Business
Sci-Tech
Mobile
World
Opinion
Life & Style
Sports
Blogs
Archive
Other
Agency terms no confidence motion credit negative for country
The Moody’s Investor Service has termed the no confidence motion against Prime Minister Imran Khan credit negative and expressed concern that it could act as a hurdle in way of smooth reform process in Pakistan.
“We view the no-confidence motion as credit negative because it raises significant uncertainty over policy continuity, as well as the government's ability to continue to implement reforms to increase productivity growth and secure external financing, including from the International Monetary Fund (IMF),” the ratings agency stated in a report on Thursday. “The motion comes at a time when Pakistan is encumbered with surging inflation and widening current account deficits amid rising global commodity prices.”
A further deterioration in Pakistan’s external position, including significant widening of the current account deficit and erosion of foreign exchange reserves, would threaten the government’s external repayment capacity and heighten liquidity risks, it cautioned.
The agency said that Pakistan had faced significant pressure on its foreign-exchange reserves in recent months, amid elevated global commodity prices and a recovery in domestic demand.
The Russia-Ukraine military conflict, that drove up the global commodity prices, has amplified pressure on Pakistan’s external position. The country is a net oil importer, with petroleum and related products accounting for about 20% of total imports.
“We now expect the deficit to widen to 5-6% of GDP in fiscal 2022 (ending June 2022) compared with our previous forecast of 4%,” Moody’s stated. “This further widening will place immense pressure on Pakistan’s foreign reserves, which declined to $14.9 billion as of February 2022 from $18.9 billion in July 2021 which are sufficient to cover only around two months of imports.”
Securing external financing, including from the IMF, will be key for Pakistan to continue to meet its external obligations given the pressures on its foreign-exchange reserves.
However, the no-confidence motion raises significant uncertainty over the government’s capacity to commit to implementing reforms, particularly those aimed at broadening the revenue base. How Pakistan will approach the IMF program from this point on is uncertain, and its participation could be in doubt, the agency said.
COMMENTS

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ

Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
Defence budget hiked by 6% to ‘offset inflation impact’
Updated Jun 04, 2022
PM tasks ISI to vet govt officers
Updated Jun 03, 2022
Pakistani fans disappointed with inaccurate representation in ‘Ms Marvel’ clip
Updated Jun 03, 2022
Taliban willing to send Afghan troops to India for training: Mullah Yaqoob
Updated 18 hours ago
Oxford programme launched as major platform for Pakistani students
Updated 19 hours ago
PM tasks ISI to vet govt officers
Updated Jun 03, 2022
Defence budget hiked by 6% to ‘offset inflation impact’
Updated Jun 04, 2022
Pakistani fans disappointed with inaccurate representation in ‘Ms Marvel’ clip
Updated Jun 03, 2022
Why prime ministers turn against establishment?
Updated Jun 03, 2022
Taliban willing to send Afghan troops to India for training: Mullah Yaqoob
Updated 18 hours ago
Pakistan at forefront of global environmental emergency: Sherry
PM Shehbaz calls for air support to extinguish Swat forest fire
Abbasi opposed to labelling rivals as traitors
Disruptions, hope, reform and optimism
An unending arc of crisis
Unsatiating megalomania
Style Anatomy: Rida Qaiser Mirza
TEdit X KUKI Concepts
Style 101: LNIN
Defence budget hiked by 6% to ‘offset inflation impact’
PM tasks ISI to vet govt officers
Pakistani fans disappointed with inaccurate representation in ‘Ms Marvel’ clip
Taliban willing to send Afghan troops to India for training: Mullah Yaqoob
Oxford programme launched as major platform for Pakistani students
We finally have Ahad Raza Mir's first look from Netflix's 'Resident Evil'
Disruptions, hope, reform and optimism
An unending arc of crisis
Unsatiating megalomania
Higher ethos and foreign funding
Article 15 — fend for yourself!
Punishing students for no sin of theirs
This material may not be published, broadcast, rewritten, redistributed or derived from. Unless otherwise stated, all content is copyrighted © 2022 The Express Tribune.

source

Leave a Comment

Your email address will not be published. Required fields are marked *