Just recently, Standard and Poor said that performance and growth of national economy has increased due to better planning after which it has raised the long-term credit rating of Pakistan from B negative to B.
According to S&P, the reform program initiated by the elected government of Pakistan has helped the country to achieve economic stability. It said the stance on the long-term rating was stable and thus awarded the short-term rating of B.
On the other hand, the agency told that long-term stability is not possible without fixing the long term issues including structural weaknesses of security risks and narrow tax base.
It also added that the business climate is negatively affected by the current infrastructure and taxing system.
S&P Forecast:
- Pakistan’s GDP per capita to be US$1,500 in 2016
- Average annual GDP growth estimated to be 5% over 2016-2019, up from earlier estimate of 4.7%
- Pakistan’s gross general government debt to fall below 60% of GDP by 2018
It is said in a statement that the structural weaknesses have improved in recent years and it is seen even after the terrorist attack in Quetta due to which the rating is upgraded. The company forecasted that the annual GDP growth in the next 3 years will be increased from 4.7% to 5.5%.
The report says that the reasons behind this revision are high investment due to CPEC, better construction and services sector activities and low cost oil.
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