In a press release, Moody’s stresses that Pakistan’s success depends on its ability to sustain key reforms to mitigate liquidity risks and ensure the programme’s long-term viability. The 37-month Extended Fund Facility Arrangement (EFF), agreed upon on July 12 and awaiting IMF Executive Board approval, is expected to provide credible financing and attract further support from bilateral and multilateral partners.
“If approved, which we expect is likely, the new IMF programme will improve Pakistan’s (Caa3 stable) funding prospects. The programme will provide credible sources of financing from the IMF and catalyze funding from other bilateral and multilateral partners to meet Pakistan’s external financing needs,” the agency stated.
Moody’s underscores the importance of Pakistan’s commitment to implementing extensive reforms, such as broadening the tax base, eliminating exemptions, adjusting energy tariffs in a timely manner to restore sector viability, improving state-owned enterprise management, advancing privatization, phasing out agricultural support prices and subsidies, and enhancing anti-corruption, governance, and transparency measures. Additionally, gradual trade policy liberalization is crucial.
Despite these steps, Moody’s acknowledges potential challenges, including social tensions arising from the high cost of living, which may be aggravated by higher taxes and energy tariff adjustments. The possibility of the coalition government lacking a strong mandate to consistently implement these tough reforms also poses a risk. Pakistan’s external position remains fragile, with significant external financing needs over the coming years. The country’s foreign exchange reserves are currently well below the necessary level, making it vulnerable to policy missteps.
The 100-Index of the Pakistan Stock Exchange (PSX) turned around to bullish trend on Tuesday,…
Top officials of United States and Pakistan including Federal Minister for Finance and Revenue Muhammad…
The EU's top court on Tuesday delivered two major victories in the bloc's battle to…
Pakistani rupee on Tuesday appreciated by 9 paisa against the US dollar in the interbank…
The per tola price of 24 karat gold increased by Rs.1,300 and was sold at…
A four-day international training workshop on Strategic Marketing for Digital Transformation was inaugurated here on…
Leave a Comment