Standards & Poor’s upgrades Pakistan’s credit rating outlook to positive

ISLAMABAD: Standard & Poor’s (S&P) on Tuesday raised Pakistan’s credit rating outlook to positive from stable, citing boost in economic growth and improved fiscal performance,

“The positive outlook reflects our expectations of Pakistan’s improved economic growth prospects, fiscal and external performance, and the supportive relationship of external donors over the next 12 months,” The Bloomberg reported quoting the company statement.

S&P affirmed its B- rating, which is among the so-called junk grades, and raised the 2015-2017 average growth projection to 4.6 percent from 3.8 percent.

The move follows a similar step by Moody’s Investors Service in March as Prime Minister Nawaz Sharif looks to resolve Pakistan’s crippling power shortages and boost investment.

The nation’s FOREIGN EXCHANGE reserves have almost doubled to$ 12.6 billion with the help of an International Monetary Fund loan and its stocks are among Asia’s best performers this quarter.

China pledged $45 billion for roads, ports and power plants when President Xi Jinping visited Pakistan last month.

S&P forecasts Pakistan will report an average budget deficit of 3.5 percent of gross domestic product during 2016-2019 with interest costs falling to about 25.5 percent of revenues from an estimated 30.6 percent in 2015. Inflation is expected to average 4.8 percent over 2015-2019, the company said in the statement.