KARACHI: S&P Global Ratings, a credit rating agency, has assigned a CCC+ credit rating to Pakistan, highlighting the importance of the incoming government’s ability to win public support and effectively collaborate with key institutions as critical factors in securing financing from the International Monetary Fund (IMF).
According to economic data from S&P Global on Pakistan, the country’s real GDP growth stands at a mere 0.29%, with an investment-to-GDP ratio of 13.63%. Real GDP per capita growth is at -1.45%, and the unemployment rate constitutes 7% of the workforce.
More concerning, however, is the data on the central government’s debt and borrowing, which unveils a gross long-term commercial borrowing of $33.10 billion and a commercial debt stock amounting to $179.10 billion.
Additionally, implementing new policy measures aimed at enhancing investor confidence and reducing inflation could improve fiscal and external metrics, potentially elevating the country’s sovereign ratings to the ‘B’ category, according to S&P Global Ratings.
The post-election period can become an economic revival time for Pakistan. Especially when the IMF Executive Board’s decision last month allowed for an immediate disbursement of around $700 million.
The country has experienced stabilisation in its economic activities, though its future prospects remain fraught with challenges and are heavily dependent on the implementation of effective policy measures.
However, the upcoming government needs to focus on meeting fiscal targets and implementing structural reforms to ensure inclusive growth.
