Global credit rating agency Moody’s says that the agreement with the International Monetary Fund (IMF) will stabilize Pakistan’s economy.
Moody’s has said that Pakistan will have to make reforms for long-term stability, increase income, economic activity will be affected in the short term.
Moody’s says that while high interest rates and inflation will continue to affect government spending and business investment, the standby agreement will slightly improve the government’s fiscal capacity.
Moody’s has said that IMF financing will pave the way for funding from multilateral and bilateral sources, while external debt repayments will remain high.
Expressing fear on behalf of Moody’s, it has been said that it cannot be said with certainty that Pakistan will get the IMF’s $3 billion funding.
Moody’s says that the next election will test the implementation of revenue-raising measures, and Pakistan needs a long-term external funding plan to meet its needs for the next few years.
Moody’s added that another IMF program is possible, but the next IMF program will be assessed after the election.
Moody’s also said that setting up a new IMF program would be time-consuming, and long-term borrowing would be difficult without a new IMF program.
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