Karachi: Moody’s Investor Services said that Pakistan’s ability to secure loans from bilateral and multilateral partners will “Be severely constrained” until new programme is agreed with International Monetary Fund (IMF).

In an issuer comment, Moody’s said whether Pakistan will join another IMF programme may only become clear after elections, which are due by October 2023. Finance Minister Ishaq Dar during press conference last week already said it will be up to new elected government to decide on entering another IMF programme.

“Negotiations for any future IMF programme would also take some time, even if they succeed. Until new programme is agreed, Pakistan’s ability to secure loans from other bilateral and multilateral partners will be severely constrained,” it said.

Moody’s says chances of Pakistan securing IMF bailout dwindling. However, State Bank of Pakistan Governor Jameel Ahmed stated that there was no plan for Pakistan to enter any debt restructuring.

On recently announced budget for fiscal year 2023-24, Moody’s said budget lacked major revenue-raising or spending-containment measures to alleviate intense government liquidity pressures.

“We consider deficit estimates and growth projections to be optimistic, given stresses economy is facing, in particular government liquidity and external vulnerability pressures, exacerbated by severe floods of August 2022, that will continue to weigh on economic activity over fiscal 2024,” said Moody’s in its note.

Published in The Daily National Courier, June, 16 2023

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