Financial support lowers Pakistan financing risks
ISLAMABAD: Substantial financial support from International Monetary Fund (IMF), Asian Development Bank (ADB), International Development Association (IDA) and G20 creditors reduces Pakistan’s financing risks, said Moody’s on Thursday.
Moody’s expects that Pakistan’s financing needs will rise because of coronavirus-related economic effects and the government’s Rs1.2 trillion stimulus package.
The stimulus provides tax concessions for households and businesses, including the export and healthcare sectors, and direct cash handouts to support socially vulnerable and low-income earners laid off because of the coronavirus outbreak. “Consequently, we expect the stimulus to widen the government deficit to 9.5%-10% of GDP in fiscal 2020 (ending June 2020) from 8.9% in fiscal 2019, despite strong revenue growth narrowing the deficit in the first half of fiscal 2020,” said Moody’s.