NEW Delhi – Pakistan a better business place than India, Moody’s stunningreport for Global Investors on India and Pakistan.
Moody’s Investors Service – one of the three main global credit ratingagencies – has upgraded the outlook for the Pakistani economy weeks afterit took a contrary view of the Indian economy and downgraded the creditoutlook to negative based on weakening macro-economic data.
In a big relief to Imran Khan’s government, investors may take a positiveview towards the ailing Pakistani economy, as Moody’s Investors Service haschanged country’s credit rating outlook from negative to stable.
“The change in outlook to stable is driven by Moody’s expectations that thebalance of payments dynamics will continue to improve, supported by policyadjustments and currency flexibility”. said the agency.
“Such developments reduce external vulnerability risks, although foreignexchange reserve buffers remain low and will take time to rebuild”, it added
This is a big positive for Pakistan, as the decision may improve theforeign currency inflows into the country.
“Moody’s upgrades Pakistan’s outlook to B3 ‘Stable’ from ‘Negative’. Theupgradation of outlook to ‘Stable’ is affirmation of Government’s successin stabilising the country’s economy and laying a firm foundation forrobust long term growth”, Abdul Hafeez Shaikh, adviser to the primeminister of Pakistan on finance and revenue, exulted after the ratingupgrade.
The announcement pushed Pakistan’s stock market above 40,000 points, whichis highest after a gap of 10 months.
Earlier, on 7 November, Moody’s made a surprise announcement by trimmingits rating outlook for India to “negative” from “stable”, citing increasingconcerns that Asia’s third largest economy will grow at a slower pace thanin the past.
Read Top Stories
Justifying the rating, Moody’s said the cut in the outlook “reflectedgovernment and policy ineffectiveness in addressing economic weakness,which has led to an increase in debt burden”.
India’s economic growth plummeted to 4.5% in the second quarterlink(July-September2019), which is lowest in 26 months, Sputnik has reported.
Meanwhile, Prime Minister Khan claimed that over the first four months ofthe current fiscal year beginning April 2019, Pakistan’s current accountdeficitlinkfellby 73.5 percent compared to the same period last fiscal year.
Pakistan’s exports of goods and services in October 2019 rose 20 percentover the previous month and 9.6 percent over October 2018.
“The Pakistani economy is finally heading in the right direction as more ofour economic reforms bear fruit: Pakistan’s current account turned intosurplus in Oct 2019, for the first time in 4 yrs.
Current account balance was +$99 mn in Oct 2019 compared to -$284 mn inSept 2019 & -$1,280 mn in Oct 2018″, Imran Khan tweeted on 19 November.
