Tensions between the civilian government and military in Pakistan pose a threat to political stability, while the presence of a high debt burden and faltering donor support further pressure country’s finances and high susceptibility to event risk, Moody’s Investors Service said on Monday. In its annual report, Moody has retained B3 rating for Pakistan, but said the rating reflected the country’s low economic, institutional and government financial strengths and its high susceptibility to event risk. It said the rating outlook was stable, although pressures on the balance of payments had re-emerged.
The broad policy framework had not been robust enough to ensure support from donors and creditors, or to effectively contain macroeconomic imbalances, which have arisen since the global financial crisis in 2008.The report said that the recent deterioration in Pakistan’s relations with the US and the end of the IMF programme had removed support to the external balance of payments.