The
global rating agent Standard & Poor's Global Ratings (S&P) in
its report on Monday affirmed Pakistan's 'B'
long-term and short-term sovereign credit rating.
The
outlook for the long-term ratings remains stable. Affirmation of Pakistan's
rating reflects that economic prospects remain favourable and external and
fiscal metrics of the country will not worsen materially from their current
level.
Standard & Poor's expect the Government of Pakistan to continue its reform
agenda and retain key economic targets while maintaining macroeconomic
stability, reducing fiscal and external vulnerabilities and promoting growth
supporting reforms.
S&P further expects Pakistan's GDP to grow
at an average of 5.7% in the period 2017 - 2020.
This
stronger growth projection reflects large scale investments taking place under
CPEC in energy and infrastructure sectors of the economy.
The report acknowledges that the present
government has improved security situation in the country, narrowed
infrastructure and energy gaps and reduced power shortages in the country.
The report points to higher than expected current account and fiscal account
deficits in the fiscal year ended June 2017.
However, the report acknowledges that current
account deficit was mainly due to sharp surge in imports of machinery and fuels
caused by robust domestic demand and implementation of energy and
infrastructure related projects.
The report expects that the external
imbalances are temporary and will reverse in next two years. The report also
acknowledges that the higher than expected fiscal deficit in FY17 was largely
caused by higher than expected provincial spending and lower growth in tax
revenue collection.
The
report observes that external imbalances will abate after peaking out of CPEC
related investments and in the meanwhile Pakistan should benefit from the
robust growth generated by investments in energy and infrastructure sectors of
the economy.
The Government of Pakistan welcomes the annual rating report by Standard &
Poor's as a manifestation of soundness of economic policies. Affirmation of
Pakistan's better economic prospects, higher and inclusive GDP growth in coming
years with stable economic outlook reflects on the economic management of the
Government of Pakistan.