Issue Brief on “Standard & Poor Maintains ‘Stable Outlook’ for Pakistan’s Economy”

Standard and Poor’s credit rating agency has maintained a stable outlook for Pakistan’s economy; negating the expected fears of downgrades, and at the same time dispelling the notion of “financial emergency” or crisis like situation at the moment.

In its bi-annual report, released on October 30, 2017, Standard and Poor (S&P), the international rating agency has affirmed Pakistan’s “B” long-term and short-term sovereign credit rating along with the stable outlook.[1] The report acknowledges that the government’s efforts for better law and order situation helped deplete gaps in infrastructure and energy and improved power shortages in the country. It further says that the affirmation of Pakistan’s rating reflects that economic prospects remain favourable, while external and fiscal metrics of the country are unlikely to worsen significantly from their current level.

The S&P’s report also expects the country’s Gross Domestic Product (GDP) to grow at an average of 5.7% in the period from 2017 to 2020, as this stronger growth projection reflects large-scale investments taking place under the China-Pakistan Economic Corridor (CPEC) in energy and infrastructure sectors of the economy.

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