Pakistan's Sovereign Credit Rating B-, S&P Economic Outlook Stable on Pakis

[A1Kaid]

KARACHI:

Exactly one week after Moody’s downgraded Pakistan’s credit rating to its lowest ever, Standard & Poor’s (S&P) – its bigger and better-known rival – has reaffirmed the country’s sovereign creditworthiness rating at B-minus, and maintained its stable outlook on the country.

S&P, one of the three largest credit rating agencies in the world, appeared to have been looking at much the same data as Moody’s, but arrived at a different conclusion. In a statement released to the press, the company said: “The sovereign ratings on Pakistan take into account the country’s weak fiscal profile and associated high public and external leverage, low income level, as well as the underlying weak political and policy setting. These constraints are balanced against strong remittance inflows that help sustain a still-adequate external liquidity position.”

The agency appeared to have analysed in depth Pakistan’s ability to pay its own electricity bills, but ultimately judged that its existing rating captured the risks of the delayed payments that many power companies have currently been facing.

“Our ‘B’ rating category considers the potential of administrative weaknesses to result in payment delays from ministries to agencies,” said S&P credit analyst Agost Benard.

Local analysts broadly concurred with the views expressed by S&P. “Our view is that the S&P rating is a more accurate reflection of Pakistan’s creditworthiness. We feel that Moody’s is overly pessimistic in their outlook on Pakistan,” said Atif Zafar, an economic analyst at JS Global Capital, an investment bank.

Excerpt: Dictum meum pactum: S&P reaffirms Pakistan

Other source: Rating Pakistan