Pakistan Cut by S&P as Fiscal, Economic Outlook Deteriorates
Pakistan was downgraded by S&P Global Ratings as a series of shocks cause the nation's external, fiscal and economic metrics to further deteriorate.
(Bloomberg). -- S&P Global Ratings downgraded Pakistan because of a series shocks. These shocks include flooding and surging inflation. According to S&P's Thursday statement, the agency expects Pakistan's shrinking foreign reserves to continue to be under pressure, as well as the political risks that linger. S&P analysts Andrew Wood, YeeFarn Phoua and YeeFarn Phua said that Pakistan's low foreign reserves would continue to be under pressure through 2023, barring any material fall in oil prices or an increase in foreign assistance. S&P upgraded Pakistan's outlook to stable on Thursday. The country faces an economic crisis, with no reserves to cover imports for one month, a dollar shortage, and delays in its loan program with International Monetary Fund. Floods caused $32 billion in economic losses and damages to the country's economy. The current administration will end by August next year or earlier. This means that it has very little time to implement economic reforms. The S&P analysts stated that they expect political uncertainty to continue to be high in the next quarters. They also anticipate continued pressure from the opposition for early elections. (Updates throughout with more details. Bloomberg.com has more stories like these.