Pakistan is among worlds poorest nationsThe driver for the review for downgrade is Moody's expectation that Pakistan will request bilateral debt service relief from G20 creditors under the recently announced initiative and the associated possibility of losses to private sector creditors.
The initiative offers benefits for the world's poorest nations, many of which have large external payment obligations and are exposed to outflows of capital and depreciating exchange rates during this unprecedented shock. Additional financial support and liquidity relief will allow fiscal resources to be devoted to essential health efforts and towards minimising the economic and social impact of the outbreak.
The Pakistani economy is relatively closed, with low reliance on exports and private capital inflows and limited trade linkages. However, the coronavirus outbreak presents a significant shock to the domestic economy in part due to the measures aimed at restricting the movement of people to prevent the spread of the virus. Moody's expects Pakistan's economy to contract by around 1% in fiscal 2020 (ending June 2020), and to grow by 2-3% in fiscal 2021 -- below potential.
The economic slowdown will weigh on government revenue and modestly raise spending, in turn pushing the fiscal deficit wider to close to 10% of GDP in fiscal 2020. As a result, Moody's projects the government's debt burden to reach around 85-90% of GDP in fiscal 2020. However, the government's commitment to fiscal reforms, including under its 2019-22 International Monetary Fund programme, provides a crucial anchor for the continued expansion of its revenue base when economic activity gradually normalises. Overall, Moody's expects that the debt burden will return to a downward trend after the initial shock.
Governance considerations are significant to Pakistan's credit profile. International surveys of various indicators of governance, while showing some early signs of improvement, point to weak rule of law and control of corruption, as well as limited government effectiveness. These weaknesses are balanced against a lengthening track record of effective checks and balances and judicial independence for the level of development in the country.
GDP per capita (PPP basis, US$): 5,872 (2019 Actual) (also known as Per Capita Income)
Real GDP growth (% change): 3.3% (2019 Actual) (also known as GDP Growth)
Inflation Rate (CPI, % change Dec/Dec): 8.0% (2019 Actual)
Gen. Gov. Financial Balance/GDP: -8.9% (2019 Actual) (also known as Fiscal Balance)
Current Account Balance/GDP: -4.8% (2019 Actual) (also known as External Balance)
External debt/GDP: 37.9% (2019 Actual)
Economic resiliency: ba2
Default history: At least one default event (on bonds and/or loans) has been recorded since 1983.
Any update on their forex reserves?
Unfair comment. If you go thru their history, you'd know that's what they've been doing for 1000 years. Ghaznavi destroyed LaWhore. Pakistan named a missile in his honor & consider him a ghazi. Ditto for abdali. They see themselves as logical heirs to the Mughal Empire whom they served very faithfully especially after Babur's depredations in the Punjab ( See Guru Nanak and his accounts of Babur's raids & conquests) not limited to the Hindu community.This is the problem with Pakistan, whoever ra$$s them, they fall in love with them.
lahore is named after Lord rama's son Lav.Unfair comment. If you go thru their history, you'd know that's what they've been doing for 1000 years. Ghaznavi destroyed LaWhore. Pakistan named a missile in his honor & consider him a ghazi. Ditto for abdali. They see themselves as logical heirs to the Mughal Empire whom they served very faithfully especially after Babur's depredations in the Punjab ( See Guru Nanak and his accounts of Babur's raids & conquests) not limited to the Hindu community.
So you see, it's in their blood. It's something which comes to them naturally. You be kind to them & they'd take advantage of you. You kick them hard & they'd respect you.