United States Impressed By Pakistan. Amid Moody’s appreciation of Pakistan’s economic stability, the United States has praised Pakistan’s reform efforts.
On the basis of the country’s reforms backed by the IMF project, the international credit rating agency based in New York lifted Pakistan’s economic outlook from negative to positive.
Alice Wells, head of the South and Central Asia Bureau of the U.S. Department of State said, “Please see that Moody’s Inv Svc has updated Pakistan’s credit outlook to positive, thanks to the reform efforts of the Pakistan Ministry of Finance and the IMF program.”
She tweeted on Wednesday, “With the ambitious economic reforms, Pakistan will boost growth, draw private capital, and increase exports.” Ms. Wells said the U.S. will bring 15 trade delegations from Pakistan in the coming year to strengthen trade ties between the two countries. The U.S. Department of Commerce reported that they would be purchaser delegations and attend the upcoming year’s U.S. and regional trade shows.
She also lauded Pakistan for raising 28 slots to the 2020 Ease of Doing Business ranking of the World Bank and being one of the top ten reformers worldwide.
Moody’s said balance of payments changes were a primary driver of the rating decision but noted that it would still take time to rebuild foreign exchange buffers.
At a news briefing in Islamabad on Tuesday, Finance Adviser to the Prime Minister Dr Abdul Hafeez Sheik said that the reforms of Pakistan were appreciated by leading financial institutions other than the Moody survey.
As Moody’s had in June 2018, Pakistan’s outlook changed from stable to negative. This also led to a decline in foreign exchange buffers as a result of an increase in external pressure.
The agency’s representatives visited Islamabad on November 27 and noted that the economic fundamentals of Pakistan were still open to threats, but the institutional strength of the country had increased.
Pakistan was listed on the World Bank’s Ease of Doing Business Index among China, India, Jordan, Togo, Bahrain, Tajikistan, Kuwait, Saudi Arabia and Nigeria.
Illango Patchamuthu said, “This increase is remarkable and made possible by the concerted and coordinated efforts of the Sindh and Punjab Federal and Provincial Governments over the past year.” Wells said Washington is expanding its Development Finance Corporation (DFC) and Pakistan will be a country of great interest once it begins.
By $29 billion to $60 billion, DFC will have more than twice the investment cap than the U.S. government agency, the U.S. Overseas Private Investment Corporation.
On July 3, the IMF approved a bail package of $6 billion to help restore “sustainable growth” to the economy of Pakistan. It is Pakistan’s 13th IMF bailout which aims to resolve the country’s economy’s “structural imbalances.” The program requires Pakistan to raise taxes to repay foreign debt and increase reserves of foreign currency.
The program is hoping that Pakistan will increase its foreign reserves next year from $6,824 billion to $11,187 billion. This will raise the net reserves of the country from $17.7 billion negative to $10.8 billion negatives in the same period.
Under the plan, Pakistan will boost from Rs3.94 trillion ($25 billion) to R5.5tr its tax collection goal. The plan also calls for further increases in revenue collection of Rs1.5tr and Rs1.31tr over the next two years. News report on United States Impressed By Pakistan.