Standard & Poor’s (S&P) Rating Services has affirmed ‘B-’ long-term and ‘B’ short-term sovereign credit ratings on Pakistan, adding that the outlook on the long-term rating is “stable”, according to a press release by the agency yesterday.
The ratings incorporate Pakistan’s significant security risks, the underlying weak institutional and policy effectiveness, low external liquidity, low per capita income, a weak fiscal profile, high public debt, and a lack of monetary flexibility.
“The domestic and external security situation remains challenging,” said the rating agency.
Apart from security concerns, notable bureaucracy and perceived corruption constrains governance and institutional effectiveness.
“Pakistan’s political landscape is more stable than that a few years ago.”
The agency said the increase in the country’s foreign exchange reserves in recent months has tempered external liquidity risk.
