Moody's investor services warns of annual recession of Pakistan economy over coronavirus pandemic

Shares
Moody's investor services warns of annual recession of Pakistan economy over coronavirus pandemic

KARACHI: Moody's investor services warns of annual recession of Pakistan economy over coronavirus pandemic.

Pakistan is expected to face its first annual recession in fiscal year 2020 due to the ongoing and worsening coronavirus pandemic, credit rating agency Moody's Investors Service said in a forecast issued late Wednesday.

The country's financing needs were also expected to rise significantly, while its real — or inflation-adjusted — gross domestic product (GDP) would likely fall 0.1-0.5% as well as opposed to the International Monetary Fund's (IMF) projected 1.5%, it said, underscoring that this would mark Pakistan's first annual recession.

The Prime Minister Imran Khan-led government had last month approved a Rs1.2-trillion relief and stimulus package to cushion the virus-caused economic impact.

It includes tax incentives for businesses, exports, and the health sector, as well as support to households, which were given financial assistance via the Ehsaas Emergency Cash Programme.

That relief package was followed by the IMF's $1.4-billion Rapid Financing Instrument (RFI) to Pakistan on April 16, $588 million from the Asian Development Bank (ADB) and the International Development Association (IDA) and a debt relief offer from the G20 countries.

All of these, the credit rating agency added, would help slash financing risks.