S&P affirms 'B-' long-term credit rating of Pakistan, raises short-term rating
20 Jul 2012
Standard & Poor's Ratings Services has affirmed its 'B-' long-term sovereign credit rating for Pakistan based on strong inward remittances. ''The outlook on the long-term rating remains stable,'' the rating agency said.
Standard & Poor's also affirmed its 'B-' issue rating on Pakistan's senior unsecured foreign- and local-currency debt and its 'B-' transfer and convertibility assessment.
Over the short term, S&P raised Pakistan's credit rating to 'B' from 'C' and said the improved short-term rating is due to a change in the criteria that links long-term ratings with short-term ones.
The ratings are despite Pakistan's weak fiscal profile and associated high public and external leverage, low income level, as well as the underlying weak political and policy setting.
''These constraints are balanced against strong remittance inflows that help sustain a still-adequate external liquidity position,'' S&P said.
Net government debt of Pakistan has been estimated at 52 per cent of its gross domestic product (GDP) in 2012. Of this, 40 per cent accounted for external debt.
