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Thursday, March 23, 2023

Moody’s rings red alert as even IMF funds can’t help Pakistan’s economic crisis

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The Moody’s assessment will raise concerns about Pakistan’s economic situation. According to reports, Pakistan’s liquidity and economic situation are in jeopardy. Pakistan’s capacity to save enough money to manage the country for the next several years is also jeopardised.

Poor Pakistan’s situation is sad, and it is deteriorating by the day. Pakistan Inflation is around 25%, with little chance of improvement in the near future. We are not stating this, but the global rating agency Moody’s Investors has raised the alarm in the country. The agency’s economists are concerned that inflation will reach 33% in the first half of 2023.

The Pakistani administration of Shahbaz Sharif has sought out to numerous countries to help them get out of this economic crisis, but it has been received with disappointment on all sides. Let us remind you that in 2019, Pakistan signed a $ 6 billion bailout plan. In response to this query, the report of rating agency Moody’s Investors appears to clear the air.

In a Moody’s Investors analysis on the situation in Pakistan issued on Wednesday, Katrina Ell, Senior Economist with Analytics, cautioned that inflation in Pakistan might hit an average high of 33% in the first half of 2023 before dropping.

In this study, Moody’s has sounded the alarm for Pakistan. According to reports, Pakistan’s liquidity and economic problems are in grave danger. Pakistan’s capacity to collect finances to manage the country for the next several years is also at danger. Pakistan’s ability to raise funds is deteriorating, and the country’s debt burden is growing. The country’s overall debt and obligations exceed 60 trillion Pakistani rupees.

This statistic represents close to 89 percent of Pakistan’s GDP. China’s debt to Pakistan has skyrocketed in the last year. China’s loan to Pakistan is greater than that of the IMF, World Bank, and Asian Development Bank combined. The scenario in the debt-ridden country appears to be precisely the same as it was in Sri Lanka in 2022. People have begun fleeing the country during this time of hardship.

The number of Pakistanis travelling overseas has increased dramatically. According to estimates, 832,339 Pakistanis will leave the nation in 2022. In 2022, the number of Pakistanis leaving the nation increased by about 200% as compared to 2021.

Not just Moody’s Investors, but also the worldwide rating firm Fitch Ratings, have issued warnings about Pakistan’s impending insolvency. Owing to deteriorating economic situations with each passing day, Pakistan’s B-category rating fell three points in three months in October 2022.

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