NEW YORK: Moody’s – one of the leading international rating agencies – has said that a new agreement with the International Monetary Fund (IMF) will improve the chances of getting financing for Pakistan while providing reliable sources for this purpose to both friendly nations and international financial institutions. .
At the same time, in the latest report on Pakistan’s economy, Moody’s fears that Pakistan’s persistent inflation may lead to social unrest and tension. Higher taxes and future adjustments to energy tariffs could hamper the country’s economic reforms, he added.
On the other hand, Moody’s is also of the view that the lack of electoral mandate is also a threat to the effective and sustained implementation of economic reforms – a clear reference to the coalition government led by PML-N’s Shehbaz Sharif.
Weak governance and social tensions could affect the government’s ability to continue economic reforms, Moody’s said.
The Moody’s report coincides with the latest hike in fuel prices announced on Monday after the government moved to raise basic electricity tariffs to please the IMF by meeting one of the key conditions for approving the rescue package.
The government had earlier presented a budget that saw a massive increase in income tax for the salaried and the imposition of GST on items such as milk, pushing up food prices further in a country where the vast majority are facing an unprecedented cost of living crisis.
The latest comments came after Islamabad secured staff-level agreement on the $7 billion, 37-month deal, which is subject to final approval by the IMF’s Executive Board.
Regarding foreign reserves, he says the current level of $9.4 billion is not enough to meet the needs as Pakistan requires around $21 billion in 2024-25 and $23 billion in 2025-26 through external financing.
Moody’s therefore says that Pakistan’s external debt is alarming and the next three to five years will be very challenging for policy making and implementation.
NEW YORK: Moody’s – one of the leading international rating agencies – has said that a new agreement with the International Monetary Fund (IMF) will improve the chances of getting financing for Pakistan while providing reliable sources for this purpose to both friendly nations and international financial institutions. .
At the same time, in the latest report on Pakistan’s economy, Moody’s fears that Pakistan’s persistent inflation may lead to social unrest and tension. Higher taxes and future adjustments to energy tariffs could hamper the country’s economic reforms, he added.
On the other hand, Moody’s is also of the view that the lack of electoral mandate is also a threat to the effective and sustained implementation of economic reforms – a clear reference to the coalition government led by PML-N’s Shehbaz Sharif.
Weak governance and social tensions could affect the government’s ability to continue economic reforms, Moody’s said.
The Moody’s report coincides with the latest hike in fuel prices announced on Monday after the government moved to raise basic electricity tariffs to please the IMF by meeting one of the key conditions for approving the rescue package.
The government had earlier presented a budget that saw a massive increase in income tax for the salaried and the imposition of GST on items such as milk, pushing up food prices further in a country where the vast majority are facing an unprecedented cost of living crisis.
The latest comments came after Islamabad secured staff-level agreement on the $7 billion, 37-month deal, which is subject to final approval by the IMF’s Executive Board.
Regarding foreign reserves, he says the current level of $9.4 billion is not enough to meet the needs as Pakistan requires around $21 billion in 2024-25 and $23 billion in 2025-26 through external financing.
Moody’s therefore says that Pakistan’s external debt is alarming and the next three to five years will be very challenging for policy making and implementation.
