Moody’s warning over Pakistan economic conditions

Moody’s warning over Pakistan economic conditions

KARACHI - Rating agency Moody's has warned Pakistan over the deteriorating economic conditions for at least two upcoming years.

Pakistan is likely to face high refinancing cost for its international bonds maturing over the next two years that would increase the country’s debt burden, ratings agency Moody’s said on Wednesday.

Moody’s Investors Service said international bonds issued by frontier market governments in Asia Pacific and Africa are coming due over the next two years in a tighter refinancing environment.

Pakistan tops the countries that “will prove the most exposed to more costly debt financing as (its) international sovereign bonds mature in 2019 and 2020,” Moody’s said in a report titled ‘Sovereigns — Frontier markets: Maturing international bonds contribute to exposure to financing risks’.

“If the tighter financing conditions are pronounced and sustained, such a situation would weaken the debt affordability for these countries, and raise their debt burden, especially if local currencies depreciate,” the ratings agency said.