Moody’s changes Pakistan view to stable

Moody’s Investors Service said it changed the outlook for Pakistan to stable and confirmed the government’s B3 local- and foreign-currency issuer and senior unsecured debt ratings with a stable outlook.

Concurrently, Moody’s confirmed the B3 foreign-currency senior unsecured ratings for the Third Pakistan International Sukuk Co Ltd. “The associated payment obligations are, in Moody’s view, direct obligations of the government of Pakistan,” the agency said in a press release.

The change in outlook and confirmations end the review started on May 14, Moody’s said.

“The stable outlook reflects Moody’s view that the pressures Pakistan faces in the wake of the coronavirus shock and prospects for its credit metrics in general are likely to remain consistent with the current rating level. In particular, while Moody’s sees downside risks to Pakistan’s economy because of movement and activity restrictions related to the pandemic, which would in turn intensify the government’s fiscal challenges, strong support from development partners including for external financing, coupled with effective macroeconomic policies started ahead of the crisis, contain external vulnerability and liquidity risks,” the agency said.

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