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PTI govt rescued faltering economy, says minister

ISLAMABAD: Federal Minister for Economic Affairs Hammad Azhar says Moody’s has upgraded Pakistan’s rating to “B ‘Stable’ from B ‘negative’.”

“It was during June 2018 review when Moody’s downgraded Pak econ[omy],” he said in a tweet.

“PTI govt rescued that econ[omy] from crises and then achieved good progress in stabilisation. Our ultimate goal is sustainable growth and development.”

Moody’s kept Pakistan’s rating outlook unchanged to B-3. It further said the Pakistani economy is improving and the current account deficit that posed the biggest challenge to the national economy is also shrinking.

Earlier, Moody’s in a report released in September, had said, “Over the next 12-18 months, banks in Pakistan would see their credit profiles challenged by their high exposure to the country’s low-rated sovereign debt and a slowing economy.”

The report said that the banks’ operating conditions would be difficult, as GDP growth slowing to 4.3% in the fiscal year ending June 2019, down from 5.8% in 2018.

The agency also observed that Pakistan’s banks face the risk of macroeconomic contagion through a range of channels, including their large holdings of government securities, which caps their credit profiles to the sovereign, and from the authorities’ weakening capacity to support the banks in case of need.

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