S&P says Sharif win bodes well for Pakistan rating
Pinning hopes on significant
economic reforms in Pakistan after Nawaz Sharif's victory in
general elections, global agency S&P today said that the
development bodes well for the country's credit profile, but
ruled out any upgrade from the present junk grade rating.
S&P currently has a 'B-' sovereign credit rating on
Pakistan, which is a non-investment or junk grade rating and
means that the country is vulnerable to adverse business,
financial and economic conditions but currently has the
capacity to meet financial commitments.
In a statement issued here, Standard & Poor's Ratings
Services (S&P) said that Pakistan's parliamentary election
results set the stage for longer-term stability of its 'B-'
sovereign credit rating on the country.
Welcoming the strong lead taken by the Pakistan Muslim
League-Nawaz party (PML-N) in poll results, S&P said: "This is
a key achievement for Pakistan's maturing democracy, in the
face of general economic malaise, widespread and incessant
sectarian and political violence, large-scale domestic
insurgencies, and ongoing tension with neighboring India."
S&P said that in its earlier report on Pakistan in April
it had outlined its view that "timely, successful, and
credible elections were essential for Pakistan to deliver a
government with a reasonable chance of tackling the country's
economic imbalances, including a looming balance of payments
crisis.Preliminary election results indicate such an outcome.
"The elections took place on schedule, without major
shortcomings that would result in a disputed outcome, and with
a large voter turnout despite intimidation and bombings on
election day by extremist elements.
"The 60 per cent voter turnout, compared with 44 per cent
in the 2008 elections, ensures greater legitimacy for the new
government.
"Moreover, the results suggest that PML-N is likely to
have a lead that will enable it to form a coalition without
the support of major political rivals or the minor parties.
"We believe the election outcome puts the incoming
government in good stead to sew up an IMF deal soon," S&P
credit analyst Agost Benard said.
"This is needed to stabilise external finances and to
provide the policy framework for necessary fiscal and energy
sector reforms. If successful, these efforts will underpin the
continued stability of the sovereign ratings at the current
'B-' level," he added.
Pinning hopes on significant
economic reforms in Pakistan after Nawaz Sharif's victory in
general elections, global agency S&P today said that the
development bodes well for the country's credit profile, but
ruled out any upgrade from the present junk grade rating.
S&P currently has a 'B-' sovereign credit rating on
Pakistan, which is a non-investment or junk grade rating and
means that the country is vulnerable to adverse business,
financial and economic conditions but currently has the
capacity to meet financial commitments.
In a statement issued here, Standard & Poor's Ratings
Services (S&P) said that Pakistan's parliamentary election
results set the stage for longer-term stability of its 'B-'
sovereign credit rating on the country.
Welcoming the strong lead taken by the Pakistan Muslim
League-Nawaz party (PML-N) in poll results, S&P said: "This is
a key achievement for Pakistan's maturing democracy, in the
face of general economic malaise, widespread and incessant
sectarian and political violence, large-scale domestic
insurgencies, and ongoing tension with neighboring India."
S&P said that in its earlier report on Pakistan in April
it had outlined its view that "timely, successful, and
credible elections were essential for Pakistan to deliver a
government with a reasonable chance of tackling the country's
economic imbalances, including a looming balance of payments
crisis.Preliminary election results indicate such an outcome.
"The elections took place on schedule, without major
shortcomings that would result in a disputed outcome, and with
a large voter turnout despite intimidation and bombings on
election day by extremist elements.
"The 60 per cent voter turnout, compared with 44 per cent
in the 2008 elections, ensures greater legitimacy for the new
government.
"Moreover, the results suggest that PML-N is likely to
have a lead that will enable it to form a coalition without
the support of major political rivals or the minor parties.
"We believe the election outcome puts the incoming
government in good stead to sew up an IMF deal soon," S&P
credit analyst Agost Benard said.
"This is needed to stabilise external finances and to
provide the policy framework for necessary fiscal and energy
sector reforms. If successful, these efforts will underpin the
continued stability of the sovereign ratings at the current
'B-' level," he added.
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