Moody’s outlook upgrade a natural outcome of IMF programme: Dar

ISLAMABAD: Former finance, revenue, economic affairs minister Ishaq Dar has said that Moody's outlook upgrade about Pakistan of current week was a result of finalisation of IMF programme

In a written reply to this correspondent on Friday, Ishaq Dar said that an undue hype had been created by Pakistan Tehreek-e-Insaf (PTI) government on recent Moody’s outlook upgrade.

He said that when the Pakistan Muslim League-Nawaz (PML-N) government assumed office in June 2013, Pakistan was carrying a credit rating of Caa2 with ‘negative’ outlook by Moody’s since July 2012. Within one year in July 2014, the policies and reforms of PML-N government accomplished its first credit rating upgrade when negative outlook was converted to ‘stable’.

Then in March 2015, there was a second upgrade when the stable outlook was converted to ‘positive’. Then in June 2015, the base rating was upgraded to B3 with stable outlook, which continued until the end of PML-N government. It was only during the interim government that this rating was downgraded to negative outlook on 20 June 2018. The recent Moody’s upgrade of outlook is a natural consequence of the finalisation of the IMF programme, he added.

About S&P rating, he said that when the PML-N government started its term, it was B- ‘stable’, which was in force since August 2009. PML-N policies succeeded in securing an improvement in this rating to B- ‘positive’ in May 2015. But after a successful IMF programme, in October 2016, S&P upgraded the base rating to ‘B with stable’ outlook. This rating continued until in February 2019, it was downgraded to ‘B- stable’, a downgrade of one full notch. This happened under the present PTI government.

Dar said that it was the PML-N government which inducted Fitch as the third global rating agency on Pakistan, which initially accorded Pakistan a credit rating of B with stable outlook in September 2015. This rating continued till the end of the PML-N government on 31 May, 2018, except the outlook was made negative in January 2018 in the aftermath of the political turmoil that engulfed the country with the removal of the elected prime minister from office. However, Fitch downgraded Pakistan’s base rating to B- with stable outlook in December 2018 during the present government.

He said that the PTI government has messed up the economy beyond recognition. In the first year, it couldn’t make heads or tails out of the economy. Accordingly, it has suffered two downgrades from Fitch and S&P whereas for most of its time in the office, the PML-N government was gaining upgrades across all three rating agencies. He added that due to these ratings the PML-N government succeeded in mobilising $7 billion in Sukuk and Euro Bonds at competitive prices. On the other hand, the PTI government has so far failed to access the international Sukuk and Bond market.